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FICAIIERAL CONFERENCE ON THE GEHEFAL EA!!T: i FIG ACT
{ trOHI-"IITTEE ON EANKS AND F I HAlt[ I f;L :lilT[RvlED I AR IES ]
11 APRII SQCO ,/ EF'TIAIiIICI.J
f,HnIftFlAN ROCB { l:--rn liir'-:'it:! I .- , r:isi-iance? Where did v*e
get this Planetary Fo*rd t' s an independent

iBal:./ i==iieT I
thcught, As i,io;-Ced. i4e acceptei thiE lest tifie pero bakit

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it l= lr.3= "i l_ f --::i,.:::.j .:r,!r,.1 .. .
i!-l*!R!':'+ !:ll-it'i::-= r:i: ,=:j:::. .:= :':,,r ffca, .,Je'll rtain

+ l1a Lt-. .-^
tilllf . .-:,, =+. .i,,i-i i, i,i..'.: +nc Fara at least

r_=rnnr i =rhl = l-..5.'=."--.- .-t -: {..'
.o tayo sE
CHA I F},IAI]
ne:-: t -
i,3!-!F!L. F':,r='r-,= -.ir:a;: i=,...c ga nezt, identical
trHAIRl'lAFr* F;G'S, ii-:= de-g.i-i-+;;rrr r=ad, ec. So, heto na

iyon, brala ng grr-:hi=ns C:!_=. rj L;r
f,HA I RI'IAN LAIJFEL . r-tr =
FflCn. E;r;Etrt_ +-irt ire refer to Section 36,

CHAIRI'IAN
Faano ba itB? Ahn lre ril;.de ih:.: Lr;-oader. "Failure or

refusaI ". ginaua nat.in b=fcre * wF adopted iyong pena I
senctions niny-o t.i!,,rirtrrhle referred t,: _cection 36, but to svoid
Li,, ":.
00?
EICAI"IERAL f,Ei.{FElifr.tf,F Cit flEtjtii+; E+til:rN6 ACT
tilol{HiTTEE lu Er5l1i'3 4:":t "i+E trii_ : ijTFRflEDIARIES)
11 APRIL :ii:r'!.": .. i:ri r 4,-i=:i,j+tif
7:-_ri,; , I.i _ 2
beinq restr-ri.i:i=-J i,: 1l=.:::-ir: :ri. :.:= :f n:.1i=d .\'trLtr a.l i the penal
sirrt: ticn= i:ii-n., -:-,1-" ::r'i..J=i -i :.r:i.:.
cHf,iiji*t+r,i !,,!i:;;,i,1,. ll :..... ;.....,.:.
iH+ lEi.'1ll!i iiliti: ilr,, :i:=r,,= i;i-r.--.i_r= Then pers'ons Er

ei-it:-ties foi:r:ij . jj j:!ir.:n,-: ,_j.,_i-j. i-.--=., 1-ii=. nati.n ag;iin
=inay{a
hitrEdEF. trEn;: =.?,irrt:-1-q !::,ih-:_i1r :,:
=fer.ific section. i,lay
be dEf errE,C, =!.:+:., .
S" it':nq ?. ;i-r;ag-ii=;Fa. i:*. ;,:-_-r, i t,:, irle r.iill rad it
posrtil'e1.*. T=lsir= i= r:.,= ;:ir:E=+:i:;:, !j= -ail even
=tatF, say Ee
in our st;i+-e$=rll..' thEt :-ri= i= =: _rr=:t_i.re grant nf a|-lthalrity
ancl then no on] can questir:n the f*.ct ihat all maj.lrity ai{ned
E r control1 iarieE .an he EHa,nined durinE that
pFF,,iod. tral wanti to Exarnine them at sone
other ve to jr-t:tify it under Eo,r| trthEr
l dr*, di ba r Bsng kr: Sen t r-r I Lei,j .
l.Iax, Sectian 7, q{a1.1 na,Eeii i:l;..r.,
=irLlrtr ritong pag_
laanayan . I torks .
'O trHAIRI,IAN Lf;UREL, ir'e I **g p:-=,,::.-ffia.
CHAIRI4AN EOC*. Ti-e;=,:r7
=t.|,.1;i::=. Eection lO.
f,HAIRHAN LAUREL. D_itB sj srgaflizstion, trr.trhairman,,.
CHAIFI"IAN RDCfi, Sige, ao-
CHA I RT,IAN LfiUREL - aFtr- f ci-a:. ang lienate versit:n
r,*alang. . "
CHA IFl.lAl.J RICS . g:: .
Ct.lAIEt1A r fltFi:l . l,le -rr= =a;..ir_r{ .rl.iat xe likr to lirnit.
oos /ft
Bif,At{ERAL TilNFEEEI'{II I|\J ii+I GEiISFi;* ,q+ijFiII.IG ACT
{ toPll-t! TTEE AH E*FiFi5 Ati-4 FIilAi"icI+L i r.:T=F.i!trxiI ARIES }
1r APRIL ?C*+ 1 triTl+!-1:ili.i .. II _ _a
I ahen t |{e wantr tt: prohibi t ihe i i reqs:i..g of new banks.

CHA I nanditc :,r* i7-=,--? "That no nehr
cc}mfiercia 1- tblishEC i.i:thin ofle year. " Ba.

ct-fAI ' Dr-trinE the Ci:rri==icn r ssmebody even
nentiLlned fram the Srna+-e i;ai.ir- natifiE lsnger,
=i"CE si
CHAIEI{Ai.; RCCI]. 0*, i''*.1;*1:,6iaai-, i.l**iri i;,.an, eh, ',The
*r:tity is a -=ii;il.:. . . '|'t*;r*t*r'y li.::l:-J -.f:.r 1. 1 authori.ze the benl:
tF an]/ f iirsnri;i.,.
CHAIRf,'AN LAUREL. D;;an =a v_=.s1,3.-i iiatifl , Bca, pal agay

liL1, th|-ee year-s ang hiiring-i fl-rtin eh pagtcatapos naba|{Asan
during the perilJC s-f a.,nendrn=n t- =
CHRIRtIAf{ RC|C" Il;),eg*7 i;tiii :a cprning. ,,t"|*y
glii-hori.rB lh= :r;;iri:-,.i.i,:_:r', ;:.i ,i l.,,,ii i:. ::- qllagi*ban!:. t' So,
-lirs{:
=ent*r}c* =; 3;i:tri.,r 7, ji i:;l ,,i,!:-:, eirthorize the banl.:
-r qLrs=i - bar'! !. " "
flEF" l'1li',.l]itl . :'!i. ii-ir :ii it--t sa Sectitf,n 7,
"|lrqeni-z-:1 ilri s,r,i i;: .,
ro t{] i:rinsiC=i- i:i,= ii:,,i. :=
::, ,!a,r
...=r-:-.it-.i:
n i:;:,.- lrreie
_ iri!. - .:
rniqht be Hilling
,,, I r-,rar-.
il]A 1ct':6t t ;:-- - , :ji;j i. ,:i.{:.;! .::.: !t+i_e,nent nge SA f ifSt
tence. n:r,-+: :1 i.i: ' -- :. ,.:,. . :r-
=i lhe f irst sentence
.
=en 1..
i+:il be, Ti:= :-ic-=i:;-.,. ::=ni-j ,.:: ,, ..,.r-: I 11;-i;s the

bank Or any
finanrrel .,-,= f.i i,-i... . ,-.r .t:,'ri, ;=r-r iriJ:1i i.: sFganize a bank.
r
; .-
rrc}vactFE r tlcL*ie-..,er..
".
FEF. i,l*R.rN= - i+ai=. +aj; --.e : 'r':-}'l* F-:-cvided .
CHAIfiI'lAl.j RDf,=" .,. ir;;t i.isrF; ..:_--?it:ftlrf- f,i a I bank shal l be
06$
BICAHEBAL CSFIFERENCE ON THE GENERAL EAT.JI{ING ACT
ICT]FII-IiTTEE OhI 8AFII.i5 AND FINANCI*L TNTERF'IESIARIES)
il APRIL ?OOO / EPTIAI'IZ{]T.{ !' Ii - 4
^-+-r-r i - r--.J :nl.,oi I'll go for five

lEar5.
f,HA I riltAr.,l LAliErL =
T*1.: = r-.:r ir .. j-n-j ,natagal iyong f ive
yEarE "
CH+ I Rl'!+t4 Fillil , lri.i i -,- i i::,i.i i ;.r, i=:+ ihe :-it ation of the
b31hiflg ildi-r={. : . ' l.i,- ,..=l- :+,=. ;i .jE:.=i-=, =c ffany nta{ banL
-a i -..6-4- '.'F." -. :- ' - + :,.'---- ---J
: --: I lUi-JLi . ,\+
t-t L +a-
Ll laj SEt|Itg
--"
tin:e. -l:',. ' .'.. :...=ii i==i-ring ner{

r.jliilE .,ir,: r.,:' ,.,1 ban}:
tr.:.len=eS. ,+= .-ri i.lrr--.:,:-r .":,=: : i,:: :-- -f1,37 lgnti.adift EeCh
=tlrei-, *h= a': '.1)t :i..,:l '1 -*. i:;.;,, ,' - i:i-,en ther ghOuld be a
mcratnr iritrr ':i. -,. , :, .i.. .+ -
Thit'=- i,! i!.1. i:l rj+. ,.,:;:: :i.'. ::: r;iii:!;r, h=to, discretisn
ito, di=creti=r,. ;' r..;= r;:j il ;':,,"j. "l=i:'= *i-r, t*hat a reascrnable
LIlliE ./dr c{l tE i Lrit: :/eil-= - :i j :iLrJvE -
CHAIFi{e$ ! i+U!1EL,
=-i.,:-L,i-..
.i,1.=i--- ih-*E is reagonable.
CHALqPIAtd FnXt" Fqtr=ilr-t-3hi=- l;,ar==.
CHAIFI{AN L+l_iFEi , I:L!:- i'i= i:a;'e t- e it clear that this
ro is cornmerc j"a I bank kasi iyclng ijiga rlir-si bsnks, thrift
i-ria i.:
banks.
REP. Fuwedeng isarna anq Linibanks dito eh, new
benks.
CHA J.L >tld11 be both, At talagang
unibank, eh, wr rr encouFaging Eh. The rnornen t they merge ,
they r+ill beccne Llnibinl.i :i jrq;di tr:., =heer 0r
=ize. New
cornmercia I banks, tarjla ite.
CHAlRI'lffl.l LAURET , Huu:.E n+ ;:=iii;5 i_=Iassify universai
010
FiCAI{ERAL rflNF=Ert;itr !lr,i Ti.:E Ggi.jE*iii, ErtJi,iING AtrT
if,St'lt'IITTEE ill'l EfttC:l3 fti'tn ail.lAl'!CI*l- ii\Ttr-tIEDIAFIES)
il AFRIL .' r=T: *irjillfii ! t: - 5
=rl#+
6r ctrnmercia:,
&flC$- Dc,. :{:{i!nerciai it.lril.: =haLl be established
CHAIRPIAII
within three .ue;r=, Il" tr*+red* i'.,*;i " lij:th the exercise of
thi= ai-rthorit,+ sh*11 . . .
CHAIRl4Al.l LAUFEL. fli.;':. i4i-" Llh.:.ir-:*ar.
REP. I"'BRENO - Pa-E may value i./{];rg ans...
,@ CHAIRHAN 'RalCO. 0, then ilagay na n6tin the yrhr:le hunk,

di ba?
REF. ano! +l1th all due re5Fect,
o puwedeng ,. f i HcLrse versisft aE fisdified and
then iyong se raph, rrbEnka. rr-geni:sd under the laHs
ghal I be in the form af --tock rlrpcratioirs and *hose ninirnum
+uft|lMs.ss+tiirrir '
trapital regLriremrnt= shall :ie prr=cribt:s'. etcetera...,l

f n othBr words, r.re lait I i-, or+ c+pi|-:,re iysng 7.L ta 7.J in
Bne Faraqraph. "Esnks organised LrndEr the lai.Js a.f the
Republic of the PhiiiFFineB Ehall be in the forn of stoch
corporationE ind the mir-r irnltm iapital i-eqltireinentE sf Euch
rO f unds shal I be pir,e=cri bed by. the Fi=:.ieisri F6ard,',
f,HAIRl,lAFl RfllC. Itcn! ?G ri ir,--e- pej-srrrs, So...
REF, t{nEFtji - YF,:i; j Jah jI :,i:J anB kaEi . yong 6a
definition,. -
{ES LFflftIFi1 F, LU|''It r.l:: :ttlt:. itvEFl, }
0lx
BICAI.IERAL CONFERENCE O}I TI{E GENERAL BANKING
ACT
(connittee on Banhgrrand.Financial Intermediariesl
April L1 , 2000{eBotw/,{}rr-1
REP. M0RENoi,.q$r(Contlnuinq) . . . def inition of terms

nayroon tayonq public person dahil iyong public applies not
only to banks.- but,,,also to quasi-banks, kaya nadaanan na
iyon relevant iyong pubric for both entities eh. pero
puwede nanang ano. -.shall, be in forn ot stock ...
CHAIRMAN ROCO. T-incorporate mo na lang dito sa
Section 9 iyan. '.No aew cornnercial bank etcetera shalf be
established within one year from the effectivity of this
Act. In the exercise of the authority granted herein, the
Monetary Board shal I take into consideration their
capability in terms of t_heir financial resources
and
technical expertise arrrl integrity.,,
REp. MORENO. puwede up to the end of
the first
paragraph .
ROco.
ro CHAfRMAN ,,T,he bank J icensrng process 6ha1l
incorporate ah assessnent of trhe bank,s
ownership
structtrre. djrectors :rnd senior nanagement
Ano,
ilaqay mo iyong "The bank shall be a stock corporation
r,rith
at least twenty,,'
REp. IT'ORENO. I{e can adopt the Senate version, Section
7 as is and then after the vord ,,satify.
(period),, come up
Ilith a chanqe period to semi_colon ,,provided,,
and then add
in another paragraph .provided,
however that no new
0Ie
BTCAHERAL CONFERENCE ON THE
GENERAT BANKING ACT
(Committee on Banks and Financial fnternediaries)
April 11, Z0()0/IE0NY/III_2
connercial, banks, . .,,
CHAIRMAN ROCo_ New paraqrraph na nga ang

ilaqfay natin
dito sa.,, then we beqin the new puruq.odh again with oNo
nevr comnerciaf banks. . . ,,
REp. MORENO. Up to eapital base.

CHAfRUAN R'CO. ,,No new c;rpi tal banks shall
be
establ,ished uithin. . . ,'. O, heto, parrner.
Ide retain
Section 7, 1, Z,3 arrd then add a new paraqraph
r.rithout a
number so that it pertains to the first sentence.
ft
covers the whole section, it,s not provided
however sa ano,
then He adopt your goal. Tt says lang, ,,No
new connercial
banks shall be established within one year...
etcetera, a6
is. ft is not a,,aubsection, it is not a
condltion, ctl ba.
'@ ft is a broad linitation to the organization
and then we
,o 'na iyon?
CIIAfRUAN ROCO- Oo, buongr paragraph- oo.

Three yearE,
three years. E*Ub,ptb{Jthe,, three years. okav iyan, di ba?
Oh, Dan, B.
REP- - fyong sa ano l_anEr, sa drafting.

IIORENO
Iyong
"fn the exercise of the authority
granted herein, the
Monetary Board take into
consideration their capability...
"
CHAfRMAIV ROCO.
Oo. it comes to some editing,
so that
013
BICA},IERAL CONFERENCN ON TTIE GENERAI,
BANKING ACT
(Cornmittee on Banks and Financiaf
Intermediaries)
Aprif 11, 2000/LEoNy/rrr_3
we can review anything ,later. Fara naman nay ganin ang

staff. (Laughter) Di tra?
Issuance of Stocks - "May issue par or no-par value. "

fto nay concept ito.
REP. ItORENO;rlx,ur,Oo,,,nahirap ito,
CIIAfRIIAN ,;IfAUREL. r, ,, . you nay want to tie up noH r{ith
the ownership schene.
REP. _ Hindi, nanaya na iyon. f,n sorry. Ah.
MORENO
iyong sa voting, hindi, hindi. Ang ano nanan par

val_ue or
no-par value, iyan anq nabigat na isyu dito.
CIIAfRMAN ROCO. Non_voting stock shalf not exceed
tl{renty percent. why do you want norr_voting?
REP. - Let ne ano ha, fet me explain. Under

MORENO
the faw the linitation iyonq 20, J0 and 60

under the
fiberafization. it refers to voting stoel{s.
,o
CHAfRMAN ROCO- you are referring to the structures of
ownershj.p na, nationa-l i tv-
REP. MORENO- oo, o0. yonr;
f na t--ionality or iyong
finit sa...
ROCO- Instead of nraking palusot
CHAIRHAN
we wil.l,
address lrhat _later on.
t know 60 l<ayrr, kami kasi
walang
problemang ganyan because
nandoon karni. f nea[. we don. t
care r./ho owns because we print
the rnoney. di ba? Unlike (
/4)
074,/"'
BTCA.IifERAL CONFERENCE ON
THE GENERAL BANKING ACT
(Committee on Banks and Financiaf fntermediafieSl
APril 11, 2000/LE0Ny/III_4
land that is liuriterl ang noney

anybody who r.rants to
discouat noney we we_lcome. Kaya,..then
you don,t have
probl.ems. fto kasi jt,s real1y
a corporate structurinq to
avoid the fjnitation of ownership
at kung L/ala tayong
]imitat,ions of ownership..ito, jto
ang bafgain ko.
Tanggalin na natin iyan kung
arro, l.atansgralin natin din
iyong itong no-Dar va lue !,;tocll. senir
t.e ve.r_sion ito. Takot
ako sa no*par I/a I uc.
REp, MORENO. Nakakatal<ot_ i yorro

n{f -I)ar. value _
CHAfRMAN ROCO. As a c0rpor.rL(:

-r.iwyer f could do nany
thlngs with this pero talo ka
nga. Binol.ohan iyan, eh_ But
ngayon. so. but ve can grive that
al/ay and say that this
was given away in exchange
for this Z0 pefcent, wala na
iyan- Di ba tanggafin na rangr
natin iyan and then lre ca'
retain that. Oo, that,s a bigr change.
Eut thjg qng
provided, let us address
the ticklish issue is ownership.
Rnp. I{oRENo- Tapos iyong
lirnit, Mr. chairnan,
sa .. . iyong f anily,ngmoup r;do ue
inpose a limit?
CHAIRMAN ,
ROCO, Dut fet,s take then one
by one.
partner. di ba? Because
nas nahirap sa family groups.
Let's take them in can.
so kung sa iyo, Mr.
Chairman.
huvag nating i_negative. parang...
(long silence).. -
Baliktarir.l natin ito.
ha? We shorten the Section g
and
BICAMERAL CONFERENCE ON THE GENERAI,
B^.NKING ACT
(Committee on Barrlcs arrcJ F.inanci .r I fn r-er.fllediaries
)
ApriI 11, 2000,/LE0NY,/TII-s
say, ".--to dete'nine cr:mp1ia.cc with Iaws and regulations

governing capital and equi t_y s L.ruc ture of banks
, the
Monetary Board shal} rJrescri-be I aws anri requrations on the
types of stocks a l:ank may issue, incl.uding the terms and
rights appurtenant thereto.', Tanggalin natin iyong
"includinq", hindi ba, ,'the ter.ns and riqhts appurtenant
thereto." you feel you needed ba the kand of stocks, the
terms thereof and the rights appurtenant thereto,,.
o provicled- --
(DSiRO$ENf,IINMWSWRA*TOOK OYER I
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EIIAI'{ERAL CSI,IFEREI']CE IT; THE GE$efif*L BilfiiilNG ACT
T COI'4I'I I TTEE gN BANKS AND F ITJAi\IC IAL I TdTRFIED IARIES }
iT APRIL :O']C J EFT iAI'iZCi{
REF. HORElqn, { f,Dntinuing J if ying the. . ,

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CHAI ftt'lAN F;flCU , Eu t iie ..i;n r !_h= i lri: percent na option
JP-!r r_Lr! r =
f,HA Mi1AN L+i-ili:El, " T,.-: f =i-=: qr .:=.r i.,. E _
CHAIfif'l*Ft P=i= - i-n +rj::-+i-i-;rr i::::-rl:s a;ho r^rant to buy.

t'lct that the;r H- L!. :i; " =-=:;i:== .i...r,:r: .1ng problerna, hindi
me'F;aFa5cii L"-,:.hi i i! i:,c i:"i..-.i i+-+ j ;r-rl i!r.*kUhdng Pi I ipinO and
=';- ==
ii: :L= r=;1ii' :r-,i:,. - -
REF, l'!ill.-i- i..'t :, ,,:, :,;
r .HA I F:t1A'.1 -i tli: ===ifi.;i Foi-eign Bank=

L-i tt{_lf.: I -r J.=.L i !-.-, .
FEF- Hi.-lRFi..lLr. f oc;.,,a :-=i-='.q:-r inaanc' ko lang

=; l.f{...r=.'-
Far-A r'ila-CqflF;r= iti,l!11 =
IHAIFiIAN Fi*tS = ,_l]n. i i'c,:t+

=: , i._=.,:= kasi nayroan Fang
figa classificeiirii,-:i'':*i.,'idi_i;i f **.,.:.:e=. Ea s{Bin, we tnade
it general na- ft:-r.i r-igii. r:-f ?il=-?
=i- incentive granted
"
tE s ferej"gn hanh LrnL-*r ii-!3=

=.--{.iii:.r shall be equel ly
oo en jayed by and exteild=d u-.-=- ihl= -;irr: condi tions
to bankg
organize under the law= .lf the Republic of the
Fhi I i ppines. "
5o, avoided all the !{e
classificati on 12 a, il, c, d, kung anu_
anong... ang hirap-hirap eh, Fagkatapr= p*ti iyong Ea
enE
and then pati iyang sa rural bsn!::F nagiatae=, bababa..
And
thEn pag burnaba, hi&di na Bliiqedg_
/v23frfr
D ! lrn fjt:t:11 ! T' j!. :-Ftr..-... ! .:t".r! ifJE ACT
i !-ntdt4 T TTr-r- nl! ?.l11r.- r1 .1i:n :1i.!+i.li j ::ri i :..rTqiii':EEI AFIES )
l.-:: +i1'J=ll U*?
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LnF 1J-i!'iel1 :..ii: i Fr.:...::E:r .i. , :- J. ba? Hind i
iFE|ini-indihnn i::;.1-= L1=1,::a ==t a=n-c-: =:a= So, iyon. Far
tho=e wha c;-ille ! i-: i.An ilE i+{,'' i:-'- i;-]tr=E t.rha are stil I
-,,t--i;-
HEF I'lllFiEhjf . +ri.rl? +:=i:1iri: :;.,-:i,= = -=. -:no natin?

CHAI RF,IAN .E:trT-,T = i+C ] !a:e -=i-= i-=== ji:,-r- :t xrongly, eh- It
wa= Fe,=l ly fiearrt j taaBa i:=r]g iil per-r=nt and this Same
privilege is extended til thosE Fihitrh -rvaild ('f the

privitege. ,I t $l*d3'$not intant tn rest--j.ct. di. ba? Itali ang
1 ly pi'nvi;o, eh.
trHA I Fl.lAN ,':RBCB. I t' s i1-'r ;.-rr , , . Parang thig
privilege is grnnted to ths=e n.ith rnsi-= rEason. Tanggalin
ang "provisa'i siguro, if that iE accetrtable. Perj'.fd na
iyon, "the banir crgani=e i-i-d=r L"riE ! ar"t -a r:f the Republic' "
Then it say=, "The l'lenetary Ftrard na,"- authorize foreign

.o banhs xho avaiLed themselves fran the rrivilsgt to own 60
Fercent cf the vnt:-nE =ioci:. i;nder the Foreign Bank
L.iberali=ation Act ar:d Thl-]'f t Earri:= 3rt, ta further aEquire
vating EharE= lf girrh h;,i;t:. l-i:-.,ii t-,g.i Frivistr.
5l . l.::-ir; g :7'.-rfi.t r]rf -i:::p1= g,.,i i.:'+:. - ,:.ng raangyayari ditA
artri*lly, i.Q 3=r:*i;i, = {ndsr benking and 40 i i-:;-;,. r;:.iI r]--.i
perrent, the;:- ;'u: L l ht-.,.I.j *rii=i -=ir -r:arii: i:-rg, Dito ng papagok
iytng rng: i r.-L+ i 1,r
-i_ ,r-.t r,t.:: ! = r j_a;TtrEFi: l-: ,F.".+i-iiir;n,
E I CAI'ERAL CONFEFIENCE ON THE GENFEAL BAFI{ING ACT
{ COFII1ITTEE OI'|i{BANI(5'ANI} F I NANC I AL r FITEF$ESI AR IES }
11 APRIL EFT I AI"1ZGh,
And a generalr "in ths exercise shall

adapt-.. 7t} percent rs the l:fiitatj--- = = - r,rhatever happen=
7Q trErtrent gf the re6El.rr--== $r a==et= 1= i-rsld by banks, at
lea5t, maj ori ty+f,!wned,, by FiIiFinq5. l!*,:ro ryan.
f;nd then H= l: l_e*d anl.' :-i:ihit ,f i- !--ivilege granted tO A
for-*ign i,: =h:1i sp +qii;l i7 en;:;::ed r:nder the same

ban
rI]ndj-tiEns io ban!:= EFgan-i=e under the !ai{= of the ReFublic

e -f thE Fh:liFtrine- -.' Thet eri=iae'-= ,/c}li- +,re5t-1En- SE|, an
i.t'rdividLiat cE|i-i -ein i-t= tE 4+ Fet-cFni.
CHA I Ff"!fl| 'LA|JREL

" E+, tjr,. ,t;,iii r-ijen , if you retral l
di.ii-ing th= i.*i=t 1.irss1_ini. j ;:i:f :tC i{1ih Itru",.
CHi\IR!'!Al'; ECi].l . y=n -
cHAIEI'IAN i_*iji?!:, . .. . ._-,..,.

:,!:.jer.-i-- t= *l lnwing what he
ha= pr-es=lted, i:==-iini.-.:' f=.-;.iq,, ._.f -!_,r=, Baged .on the
heli*f , r iqht,.. .:,..- ..i!-:--:rir i ti r |1,:i t, ., ':,1,:trup that Eontrslg
th* h:nL-:ng =i..:ii:=!!i i.r.: r,. ii_,ri jli-::j r;:r:
=,-r:n5'T}7 and the group
th*t r,:nti::1= ii: :i r-;r::j;irt-. ,:;:r..r. i=.; r :.. :.i r.;.i itirg.
.l lHAI Fl'lilr] L-:a:_r _ '.Fi.
[H*IPflAi.j !-n:j-,.a_ . i'i=;r, i 1: :;==ir:= liat in the Eenate
ver-stnn. thi= l-i*
= L+=n ;iii,j -+===ij ..ri-i:!: iirE lLrBitatien to ths
tgte i resclrrceli iJr f J{:: Frir:; : ; .
CHAIRI'lAil yes_ .:.; ft_ii:-..i.

E$iS.
CHAIFI'|AN LAi-:=EL, S,_: i: t here
-r; -i:i: c-e area that you
may ccns j-der Ii:+i: it;g at . ilf t i:r... j:-:
;rerrent foreign bank
rontrol 1+d, rari i.,,.F j_; nj. i- r,i
=iii = t-i-i F--ent maximun of
EI CAI'|ERAL CONFEPEI.JCE AN THE CENEEAL ESi'iT:iN6 ACT
iCAflHITTEE fiN =AI';h15 AND FIN+TjIlAL ] TiTFFfiTD I AR I E5 }
1 1 AFR IL 3+rl{:} F-tr: I +f,! iflr.i .r''.j-4
the pertrerr'LT i:t i:,tii=r- r+-ri'J= " :' nt.i i4i l l not have ts
=l}
frli-eigfl ban l.: ;f 'l l-,;: f,* FEri:eni- ;:=ntrr-i iing nore than ten
perrEitt n f th= t ::: i.gr: I'r=i1l'i -i '
=
EEF. $A!--{EFJi:.. ;'ii. : ;.'r-.; f r-: L ili- ':t+rrtf f areign bank '
f--HF I Rf'1Af.i !-EllFrE:, . ll.a=:. lii=.=:::lL:--'j !ri:.alia= na :.yanr Otre'

j d* :.irt l:ncL*. !'i= u-i :-- :: I .' = = l, - i:i::. lr;, if the 70 Percent
iEil,-Lf1! L= =-? l:.: t='ti -ij :-::1 I :-i i :i:' j f i: nt:ldings'

=
IHAIRflelt] =l--rf':, ;ii'l'-i:rl i'..' r 'iiiri -,5ir' ang Paghatanda k'o

niyan 5a ='LJli!!-i::' i":i :i= i;"-= i-:ir: baa!:a, their total
as'=iet:; is 14 ;'*;,.;ri.
CHA I RFlA$l Lf,UFi=-. F';;-,i=i=srr -
CHA IRl4flN Thel !r;ve ia i:i: 'r; '

F:tf,L-] .
j'
I'ttrw. the rEa,=Gr! ;r '--'-l rir;li' t i'iai' j],E ina+i3 it restrittive
is becauge it f '=vrr.l ti-tE f'?rei-trn' tl:+ Filipifto bank when
they go abrtr,ad ' Hasi . +{:) kasl'. - id i4i I I en joy a{hatever

=,:l
or thy can enjoy r,rhat FecipFcral I v they grant us. ldhen

@
you limit them, 'If 1l uge Eank af FI, Eank of PI is tdklng
.o uF right l
a mEdiLrm---i.ze bank in UK or in
,troban[:. I think, tr,{o or three
morE groups cor0hiihing can c=sta,bl islr e medium-term. , . 5iIa,
ang -1O parrent ni la, if the; di;n ' t hei.E any f,O percent trf
restrictioni kahit rnag-re=tr-icti-n silE ea JO percent, He
wi" 1l never get 5t] perr:eni ;t ri-:.:r ELtr:li-1EEn cr:untry - 5o, r+e
don't r.Jant i.heffi tc] havE a tJ'ri:+ Lrf getting batrk at us and
preventing thec,ret:-ca11y becali=e lie hsve Eupposedly gtrod
028
E : CAi'iEfiiCiqF=F.:;:':,i!:e Lri.j
f, T:-;i Erii--rr l*ii!:ii'Ifi ACT
if,trt"it"liTTEE Di\i E:*i';!':3 *:'-;il Fln;'+l'jiIAL I: :T=F'\--D J a'r r E5 ]
11 &FRIL ?tr-!l-] i E|- | rnl:iu'.t .'v*5
b,xnherg. th=arql-ii-=li';. iiei:i:. f;i-1. .'i . 'i, *- 7. Yau can

even have a larger baiiP' in Eiit-=tre li-r+;i i:l the Fhilippinest
di bs? mig=iiiilil; :i- 1;, =: " =Li.Etrtrsing thy ccnquer
Eecar-t==
lQ Fercent af the business= 5i:, pab*;-;aan n;tin. lrle ghould
nt]t make them point ttr our i ar.; as.< i+;y *f re=triEting the
f lar+ of the Phirli;ppine banh abi-siai. Flahit ne thirtyr when
I irti, .l:i1','
they make itl| cent on Li= r F,e iii 1 I never get the 3O
l,Je are ntrt big
Ent]uqh.
CHAIRHAN LAUREL' Ni..:r+. iiie.e'= : ccllateral issuet
0:a- ! iail t* d:=iusg ihi= xlti: ;"':r-r. Iyong ccllateral
i=5i-te. th= fr:reign ;r* ==i.ibii=hed here *iIl be
u.rani':= -rir:+-
inc!ined ts lend for-eigner-= aE Llei I hef-e" gor iyEng area

fla iyon -,- ue have t{] la-h a-e that. l'!r = Chairman .
CHA I RI"IAN RSCO . l+hat's th= i dea? T{] rnek'
t f -.r^-*.,--t -a '.
fHAIRt4Atj LAUfi=l. ';*--. i;i =if=..1" Yau :ann(}t really
eo ccr-r t.i-t:l Gr ieg.iri;ie 3=nii:-i:=" ai,.=;-r rannct stsYt "Hoy,

pu+asak i.ay,_i I i'ii: ,iEr r-r ir,..iw.!! ::a', L.,ir i,ia?pApahiram ng higit
sa 5* p=rren t ci f *; =:-1ri -ir:-.<i i tu i,ii:r-q n: nariritO.

fHA I Rlr+l; FilI:1. ';ja jar:i -'iifirr;:.j:, -
CHA I Ffl*i-i | +ijF-L , .1.:=. j; 'L' = ::.j. wdlang papesok, you

fannf"]t reaiii.' lii:!; r'.! l-:,'+::r.; 1,!t:!. t:=, - In the gamE fienner
as lr,,e arF t11 ing !,,- .il:..:r-.r-!. ,:r;;: | :;, ,rl:e COuntry by Saying
iE p=r-ter,t d;Lr;t .;,-- i'i iiri=, :-1:r.ili
i'-
=:i=,.:ti;-re=
VN
27
EICAHERAL CtrNFEEENCE ON THE GENER*L EAN}IING ACT
{CSF{T,IITTEE ON BANK5 AND FINANCIAL I NTERFIED IARIES }
I L AFR rL ?rl+O / EPT I AI4ZGN r'v-6
CHAIRi1AN R!]f,n. So. xhat' s r.he idea?

FEF - |.IORENG. * l thrlsg h i7o-rg general prudential
asFect-= ng lenJ:a:': i.:45afir6 .ra LirrdEr ilihsr provisions 5a
Centr-a1 Fenh t-eQLrlstir-1n.=- l"lahi. r ap '--;

i !-1 kl.tng foreigner ka'
Hahirap nanghira= *q *;1al'irrg snc,-:-i tl! Halang krinflaring
sernri ty rreC.ii.
fllAISFAH ia!!=f; . !r;, :i: '= ==l ! _i 1:r"_iu!'
FEF. r4lREl.i-j ;:_-:.: i 1 j..i,.. j:.: i 1= -:

].'=fi9 PeSc}s natin and
then. =.
CHAIEI'tAll t;il[i], 1.,!= ri r-ri- : i::r', = =i;l!i=h-
EEF , !"llIFEf it I E.i- i.: - -. = -:'-r:r

r=i'= .
f,HAiHl'1AN Elil = -q:':. i'+iri=.1-1i:i= j- - i:i= i i_ oi]n Pa rin 5i lang

singlr bsrr**er'= th= =:.:-i=i= i,l-!-utter'5 Iimit i5 5Q
:i-'.!it=
percent ba" aai: b=*-g. =s i-h*7 ::.irn=i in any event Pxceed.
FifteEn pei-cif,nt is ;*,.
s CHAIRHAN L*|JR=; .
?3 perttnt.
I 'r: -!r:l =,-ii?" if we increased
I 'at nci sui-e. *t a*'r i-*iE - - '
it tcr
o CHAIRHAN ROCO. Ho. but that nay an5wer...

ID5 I.EOIIISA"E.- LTICHING TI]OK t]VER. }
azB
BTCAI{ERAL COI{FERNNCE ON THE GENERAL I]ANKING ACT
(Comflittee on Banks and Financi.al fnslitutions
ApriI 11, 2000/leony/vT-1
CHAIRMAN BOCO. ( Continu j.ns) answer your question.
Since they cannot lend in any event up lo fifteen percent,

they can lend only, Iet's say, kunq 25 percent, we nake 20,
2O of 100 is one-fifth onlv- So even if they own 10

percent of total resources, they can 1end only two percent.
CIIAfRL{AN LAUREL - Ang problena diyan iyong nentality
ng Filipino. Iyong deposito nagsi-shift sa foreiqn bank6.
So you nay have a 30 percent resources.
REP.,",UoREt{ffiNllffiaganda..iyong isa, iyong 70 percent

reserve Dust, .be$lBffifr&i'cdtiwell.,.contro1 led by na j ority ovned.
CIIAIRHAN ROCO. Statisticafly, it's not supportable by

data na nay shift to foreign banks. Ang impression ko is
may shift to l"ocal-. Ang impression ko talaga ay nay shift
to local, to the big banks.
LAUREL. Only because of share numbers
CHAfRIrllLN
.o because nasyadong naraming Filipino banks, ,no, but if you
look at the deposits talagang iyonq rnqa nerongr nentality na

foreigner ito, Iipat tayo dito, dito tayo nag_deposito.
Yeah, then you nay have nore funds available for lending.
REP. MOREI{O. Hindi attractive iyongr currency natin to

this foreign banks
CHAfRMAN ROCO. Ano ang srrggestion natin?
CHAfRMAN LAUREL. fn other words, I,m just looking

at
0?$
k!-.t'-q----
BICAIITERAL COIIFBf,SIIGEil'ON,ITHE,. GENERAL BANKING
ACT
(Connittee on,Banksuand*Einancial Institutions
April lL, ?000/dtdoulflru[-2
;
the protection.
CHAIR}IAN ROCO. Yeah, yeah-
REP. MORENO, IyoDg nga fully_owned bank na...
CHAIRMAN tAUREt. Citibank. Bank of Arnerica.
REP- MORENo - fyan, sa kadanihan under this set_up.
CIIAfRI,IAN IJAUREL. Hindi lang iyong apar. .
REP. MORENO. yes, hindi lang iyong fourteen.

CHAIRI'AN ROCO- But only. if the bank... So they are
futuristic in any event to current 52, di ba, which has
been done as you guys has been acquiring to a foreigm-.
-
So minus 2, ninus 4. T think 4-l na lanq, trut not because

of
the foreigm banks but because of the focai. Nagpapaunhan
itong Metro at saka BpI, qanoon-
CIIAIR-Ir{AN LAUREL. So i to iyong biqges t probLen uatin
.o sa bican, Iyong iba ol<av na.

CHAIR_IiIAN ROCO _ yeah . So that nay address the
problem. So, papano natin itong, ,,The
Monetary Board shall
adopt as rnaybe necessary to ensure ownership
or control of
70 percent of the insurance or assets...
is hereby bank
which are at least najority owned
by pilipinas Bank.,
CHAIR.IITAN LAUREL. Kasi iyong thirty percent kaya
nilang punuin iyan. There are already 14 foreigm
banks
nOfrr.
030
BICA}IERAI CONFERENCE ON THE GENERAL BATKTNG ACT
(Conurittee on Banks and Financial Institutions
APril L1, 2000,/Ieony,/VI-3
CHAfRMAI{ ROCO. Thirty percent and only 14 percent.
CHAIRI.IAN TAUREL- So pag binuksan ninyo iyan...
REp. HOREN0. So lrala tayongr window nito, eh.
CHAIRMAN ROCO. For what?
REp. IIORENO. Itong oppor:trrnities avaifabl.e for aa
long as the Law is in effect un_like doon sa foreigm

privatization., nerong incfusive periocl .
CHAIRMAN ROCO. yeah doon sa period-
REP- MORENO- Oo, ito wa]a.

CIIAIRMAN LAUREL. So, open iyan.
CHAIRMAI{ ROCO. Kailanqan nay specific recorneudation.

Para sa akin, okay na ito.
CHAfRIAN L,AUREL. It.s anti-liberal.
@ CHAfRHIIII+,RO6Odrt,&tlithin 10 years fron approval of thig
.o Act.
REP. tion dito is the pleasure to

foreiqm banks kaya*i,maganda rin, unlike doon sa House,
Puwedeng any-fo*GEfbonk.
CHAfRUAN ROCO. Oo nga.
REP- }!ORENO. Baka ang nan!ryari naraming

foreign bank6
ang hindi puflasok-
CHAfRMAN ROCO. pabayaan no na sifa. They will

conpete among each other. Thev wifl kil1 anong each other.
031
BICAHBRAL COI,IFERENCE ON THE GENERAL BANKING
ACT
(Comuittee on Banks and Financial Tnstltutions
April 11 , 2000/l.eony/vr-4
They are so irig. you don't have to worry about them-

Anyrday, seven years, five year, ano. Seven years.
CnAIRI.'AN LAUREL - So that wifl sinplify natters_
Tutal [arauing, nga 60 percent. 40 percent
CHAIRMAN ROCO. Oo nga.
REp.,l,IoREN0aryAngsgnrlo_9ulo, eh.
cHAIRltAillROEOiliiiil[i,O, ito ngayon ang record, ha. So the

first sentence .is subject to guidelines provided under
Section 3 of Foreign Liberatization Act. ,.1fhe llonetary
Board ean authorize the foreign bank to aequire up to 100
percent of the voting stock_ On]y one bank orgranized under
the laws of the Monetary Act, period. provided. di ba,
and then dot, and then it says, .,The Monetary
Board nay
authorize foreigrn banks which availed of the privilege
to
acguire up to 60 percent of the voting stock of the
.O bank.,,
Hindi na Provide<l- It is not of the fater idea. .,The
Monetary Board may authorize any foreign
bank to avair
itserf of the privi r.ege to acquire up to 50 percent
of the
voting stock untler the Liberalization
Act on the Thrift
Bank Act to further acquire votinq
share of such bank to
the extent necessar.y for it to own
up to 100 percent.,
Period. h the exerclse. ah, the opening sentence pala
t/il-l be, .'lgithin seven years
fron the effectivity of this
fi?r
'
BICAIiIERAI CONFERET{CE ON TIIE GENERAL BANKING

ACT
(connittee on Banks and Financial fnstitutions
April 11, 2000/teony/Vf-5
Act, conma, subject

to g,uiderines provided under section 3,,
etcetera, Then as f read j-t na, di ba? And then, .,In the
exercise of its authority,,. f an on page 36 na, *the
Monetary Board shafl adopt neasures as naybe necessary to
ensure that at aII times the control of 70 percent
of the
resources or assets of the entj.re bankinq systen is
held by
n banks vhich are at Least majority owned by Filipinos."
REP. MORENO. Mr. Chairman _
CHAfRMAN ROCO. yeah.
REP- MORENO- Accor<linq to lh is findinq on the

applicabiliLy of foreiqn bank, 1ibera.l. ization of 1aw is
confined only to Seet iorr 3.
CHAfRMAN 'ROCO. Gi ve ne l.he ru Ie on foreign
fiberalization -
Tanggalin natin itong ,,checked to.,, di ba? Within

ro seven years from the effectivity of
this Act subject to
gruidelines provided under the Foreign
Banks Liberalization
Act, the Monetary Board nay authorize a
foreigm bank to
apply one hundred percent. etcetera, period.
And then
walang proviso and then it begins agrain. ,,The Monetary
Board tray authorize,i*_the.*f oreign
banks vho avail.ed hineelf
of the priviLege to acquire up
to 60 percent.,, Second
paragraph na s ignro iyon
.
033
BICAHERAL CONFERENEE ON THE GENERAI, BANKTNG ACT
(Committee on Banks and Financia.l. Institut.rons
April 11, 2OOO/leonv/vt -6
REP. MORENO. puwedeng within t.tre safie Deriod?
RoCo, Within the sane period, oo, sige.

CHAIRITIAN
"Within the sane period, the Monetary Roard may authorize

any foreigrn bank who avaj led itset f of the privilege to
acquire 60 percent of the voting stock of the Bank and that
h/hatever of the Bank's Act to further acquire., di ba?
Third paragraph. "fn the exercise of its authority',, then
the fourth paragraph, to me anq parity close ito palagi- I
keep putting this in a.tt the .Iaws - Anything they enjoy, we
will enjoy. That ueans ee only have tno rules of

ovnership. Sixt.laslrencent by a bankinqr, forty percent by
,
a
non-banking ort'Sfrsrryiidjndividual . Does that solve your

problen?
REP- MORENO - Hr, Chairnan, iyong last two paragraphs.

Ilaving been enbodied already sa foreign bank riberalization
ro and there naybe other provisions in the
Foreigm Bank
Liberafization Act that we nay forget to
incfude in this
kit, why don.t we delete the last two paragraphs
and
include then doon sa openlng doon kangrna
iyong ....in
accordance with the quidelines, rules...,,
and etcetera.
CHAfRHAN ROCO- What is the last tvo paragraphs
?
Iyong 70 per:cent ?
REP. IIORENO. Itrt' ito, iyong 70 percent,

034
BICAUERAL CONFERENCE ON THE GENERAI, BANKING
ACT
(Connittee on Banks and Financial Institutions
ApriL 11, 2000/ teonY/vI-?
CHAIRIiAN ROCO. Huwag, huwaq, nawawalan ka' Lafo
akong magri ging*cobjecti.onabf e .
REP.' lfoMru*mNuq$ibut this is arready in the foreign
bank law.
CHAfRITAN ROCO' r know, but repeaLing this, this 1S
critical. This is 70 Percent of the resources shall be
or.rned by Fif iPino.

REP. MORENO. Yeafr, but then aside frolt the 70
percent
neron ding mention dito about Monetary Board 6hal] pr'event

a dominant market position by one bank or the consideration
of two-..
CIIAIRuAN Roco. Can we address the bank'
REP. MORENO etcetera, etcetera '
CHAIRIIAN ROCO. Oo.
REP. MoRDNo. And then nunber three..

ro CHAIRMAN RoCo. T'ltat is nol- repeal. That is not
affected.
REP. MORENO. Yeah. I ,jrrst wanted to nake sure that
the benefits availed of under this Section wiII algo be
subject to the Foreiqn Banking Liberalization-

CHAIRI-IAN ROCO, of course. That goes without saying
that we availed under the Foreiqn Liberalization Act, They
are all the sane subject to the guideline under the Foreigm
035
BTCA}IERAL CONFERENCE ON ITIE GEI{ERAL
BANKING ACT
(Conrnittee on Banks and Financial Institutions
April 11, 2000/Ieony,/VI-B
tiberalization.
REP. MORENO. Guidelines and. -.
CHAIRMAN ROCO- No,
subject, I'e just say subject to
the Foreign Banks Liberalization Act.
REP. MORENO. Ah, I see.
CHAfRMAN ROCO- Di ba, di ba? t,ara wala na tayong
ano- para r.re (lon't sl,eak ba_re, Hc must nake it
very
clear. The 70 percent controllcd by liilipinos is our
ano
nga protection rra lang tlris anci thal. as
Chairnan Laurel
here is henching on, but if we remove Lhat it
will even
give rise to under interpretation trrat we
don,t necessari"ly
like anynore-
REP. _
Atthough, for lnstance itong last
MORENO
paragraph sa Section. . . ,' . . . sane

conditions to banks
organized under the Republic of the philippines.
ro Foreign Bank Liberalization LarJ extends
I{ov the
the sane reciprocal
benef it,
not onry ,.,-io. . rocal banks but t o rocal listed
:
conpanies.
t fl *#-:'i''ii;i""' i]i'*
cHAf R_ltAN ROCO.I We are not mod i fying that Lar.r. There
is nothing in here that pre_inposes.
REp - lIoRENo - r just rrranted to clarify that for the
record, Hr- Chairnan-
C}IATRMAN ROCO. You cannot refiove that.
That,s our
036
BICA.I{ERAL EONFERENCE ON T}IE GENERAI, BANKTNG ACT
(Comnittee on Banks and Financial Tnstitutions
April 11, 2000/leony/vI-9
only our coneession to the Filipinos, eh, di ba.

REP. MORENO. Bccause the last paragraph of the biLL
of the Senate version says on fine nunber seven, .,enjoyed
by and extended the same conditions to banks organizes
under the laws. " It applies only. it covers only banks.
CHAfRUi\lil ROCO- Oo, it does not nean that other laws.
s tli ba? There is no repealing clause because we,re only
talking. " here!'{'otuomnLq6hip,n,banks - Magiging $rriter nanan
kung Ia
So that's Section 10 and 71, Mr. Chairnan. Oo. the

percentagle of foreign-onaed yotinq stocks shall be,
therefore, easy na. Oo. direct na to controlling whoever

controls. Sa fanily groups ano ba ang problena dito sa
@ faerily groups? Section 11, page 5.
.o REP.
section 3..
}'ORENO. Mr- Chairean, ang- rrorry ko lang is
-
(DS RowENA r. PENEYRA TOOK OVER)
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i:if::.!:r,. J'ii.li:ilj:.!,ii.j,, i,i+r,r.:;.r 1;:.r .!:r.:..rr,r;; i,.!t. i:.r,, r,!l\,,
i.ll..ir.:! l:J:iil'lr3!i.i fi:i.ii.li.i. irrf, tr.., r-tir:i1 ., {ii,-:.. :i. i.r .i.r:1,...1}r "
,:lli:.'::'., !.ll:lli:l:i.|..ii..!,, L.r!,rr!+i:i ,rr. .::i:if. it i-i:.,.i. i...,ri:l ,.
r-:r-i,i r' [i:,'lril'i fj]t.ri,:r.l ., ir'r'.r'1: l; i'i::." i',{::,r-i.,-i.{r.! i. * tJ i. .r i. ir rr * .r rs a'{:i

n {:if -, '- fI ii ii l.:. {:: {:.r t- l::,
(::, t- i1 1: :i. i:rt.t ::i,,
ftl;:.f:'" l"ltllt[:hll],, tJr.i :il.Iii.f. *clci r.rurri i:jr tri]lL :in the
c(--if] I,i r.+t
:[ :i, n{: -
{::}tA:I d r:.,n 't r;Fc+ jl. atrrq ths ctj,f.ference. c,)lt,,

lAll''y dff ycn.t vFs: l{h$..n tliay ;ii-rthnri zp thnm ,l.r:t
ftUfi'ffirt;.r'{ $fi d thr.,-;r 1+;:..ri+r. :i it:'
.a) f{I:;.f,., llli.lf:{,:rl.l(J

" .[.f i:.hnI (Fz cr.:i..,-ct ,i,+s
t"
.t:.,,t,.i,
t.]..tAi. tr:t'ltrt.t
'
f(fi[C] ,,r'I i''fl,, 'l:. h.1 t i ri v r c l.:i .i::i.
*i.r n.i, 1;rw
lllllltltif{l l,'i "
t-;lt::l:!
" l"l ft'i:l.ltl ,, l.k:. Lilt l: .f .ji h...: au,r t*
:i l. J,lsi .1.
{:n .l y es.fl
{:ll,.rI} F r'F, h:i.

i:i "
{:.'F.JA.t J:!:,',rr,lt l{{Jfi[:t l.lci,, l:r.it :ic;"rr" 4D

" i-r(nr {:F,.] t ncn_.hanl,i.j,{
*{j F*,,1t-{;:i..?n t h*ri lt:i ,, |;.r,:r-J kn ),:.t.11.:.1.s1.i;,"t ,. i:t,,, J.,::.. I r i .i a ,n.-1al e.-ex (: eFd
tirJ .tr.i,, {_t,.} i.,n fil.incJ r{"r{:l i:js,li-i::i::.,,].!: ?:riiij..{-_r:-j.: f: i_-,:1f., het J,fit-(..? i cJrt o}Jr}a:rcl4
siil t^f li+:n l- i:.n du ),a:i1.1 ;tl* | .ihr+ !:!t-t|i1-.!.1.i:.! i,:,
Fillj.l;r,, l"li.ll:il:j.!_..tij . iil r l .l .:.,,,

i:r.r ;,:t::i. r:, :i.,; * sti J. d FrFi.[:i i i n,,i r.;!,
i.ll.fiin:l:i. i:rr', 1:.t:: l.:.iirt i;:.ll:i,r. .l :i . ; t t
..,,.
i:. ,,:: ,, -i,,.ti:t i i.:. t_t ]- !11... ti ::.r,(J t he fi!.ht*r'r, "
lJ L t.}ll"llli.l:li::r1... i:l {ll'li:: L:.1;r t:.l.li.: i::. i.lt.ll'll.l.,. i i l::ii:.
t ln.* .'in li,rr] I'iei ,iriiJ l:: i,r;!.ti::i+.i
li:rttini:i .i.i:.l:i:.:r,lii=.:rJ:i.*r.:i{iilii
diFr. ri.l -1.:l ,, ill{)${i.. ;:t+n r: ,. r..:\./-1,/ -..:} .1. :1.
fi*,, urr". ' r'g' (;tgJl te r{i ir:i. p,,

CHA iJ" tllr-L v.ih*t'r; the Frfihl.Fnr wi. {:h
that? 1a hdn t" hr.i t hqrx c*n Xclll ex ceerj

1.0{)?
ti:ir::l::',, Flfil;jf:Hn,. H:i.nd j.

" ij*fi:i..l i..i:i:: r,n,ranq 1,*re:ic1n
6 r::Iifirph{:r.l.d:i.nq{.'"!ii*.rf[ffuh,1{id,6e!:i.n$t
ni,.rililiJ l:i',' n {'{]1rcj:i. iJ n l:rflnl.'.,,

fo:t.L !i .Lh,:..]: .l:li{.jl iiO pRrcer}t :i1:
f.lf"lr.:i .1,l:tl.li:,1'l l.{{.L{.:i.i - lJr.r.i: tiiat'r 't iu:r ,.,,,, 4t1 Fercs]rr.t ,rr.}cr
.1. i. ril:i 1: f:t.i i.fi(J:i.u:idrrnl.s: ._
" f,l{.llll:::l.ll.t " Ye--., ::,,i irrdi!,ridi.ra.i.,, F'{*r.cr thF 6Q

fll::F
Fercr,n'l {:
i::$t.t.l.d hft fiHrir.+cl l:i;'/ l;:i.:l:ifrj.nfl*.., lhat-'i_r t.,li,-,( f. :i.t :jay,,
C!"lai.l:i:iFlrx,l.l l.r{lt.lij,, 1ii:" j. 'irr .ri:i.,,:i fl,:t 4fr fnre:iqn

ii!1{::,i::i1!ii::l d:i. !-t i:l::i itr.tri 1::rti.i:::.i t:tt-! :i.r.irJ:i ,;:i rirra.l.s ,l_n cl ncln--h&n I.;
(::(:1I Ii(rl',r l r.r1r1{:: iirr,. .r!,t'1..
I{li]Ir,. Fl(.!l;tljr.l'ii.i ,, i..lrr .l:i] ,:i i.j l;u.... i..r !.j,!.1 l,:
I'l..ldr'l l:;.i'tr...l,t iit;t ri i
.o tif::.|:r ,, l1i.if;:[i !.ii..i ..
i...,j::
itii:i
,
.l:
i.t*.: ,iii l::,.,.,.r, i: it,r.i
.i: .l:rirr.1.
tJ be cJwnirj hy
f:::i.l:i.t:r:ir.itrlii,, i:jrln i:i.1ut.i i,.rr,.,i:: .:.,,t,,, can
flt.lirriit *nreiqn
n i../:i. d t.r.r.l ,,,.,.
Y
;i. rJ
i.l..liri il; |;'irJ- i::. i ji.tttrl.i i:i.j fi.,i.tl, j.ii,,i:.|;i I
044
FI CAIIERAL COhIFEREftIL-F f]Id TlC
icur{r1j rrEE oN THE GthiEhAi- riei.ir.:rr{E
o*3-: Acr
livAilciAl ,nrieRNeotRRiEs}
rl ApRrL I/ EF r rAFrzoN
"o"r!t..llu
Z{rr-rrj , viii' ".:""i
REF. ffORElitE {Ccntinuinq
i_ , _ ind.avidlral
control thrae
percent on top of the
4ir percent vata.lq Etock
he orlng?
CHAIRI,IAH ROi:O_ f.la
t under tirai prp.71=ior.r.
REF. l{OftElqu. !r,;1s tr:.=.1n!
trrnhrbitrsn= sa control.
lang ang hinahaflat, Iyon
hrt. F.FBhj.trj.til
' ' "'r: r-'r' rlcr! applies snly
ownershitr. to
CflA I HFAhI fititlt- Llri r,,rlr fhthr. . ,.:, ._

and non-b*n i::.1ns rr:rFtrl::re = tEr ElLqn individua I
r.i crl !.,ri -r.
j. a: ti t ne ex ten t on
JLtst to achie,.ye r*i!t,.{__
= layering
t Ea 5l i:erren'- Fjiir 1e yoLr
percerrt anlJrdar/, in can own lO0
a r ni_s:r en :;.'J!r r trrt :,:,t-l.Jr*tion?
the t
l.lho r+ill do
-:
FEF. t-teFlEtrttl. I l:= aJ;-_ij,g.r

riidr...,.:rir:.i
or"rnershl tr js nnJ).. " he knorus that his
liFi 1-r, 4ii F]-rf*nl. :.!t:!"J. betwFn 40
majority, andt sBy
eh pu*edenq iyEnq 1f
trercerrt lillitllha na lang
prclxy. si.ya ng
A v{ftir}g tri-r=r: that
sii).. "-
CHA I RI,tAl{ RflCO_ Hindl
t:e mairitrnd.li,ran ng
probleme eh.
lrje have iot-, percent
tr*gl:atapcs, _ ,
.o REp. _ Hindi fBreiqn irank

HAREf{0
fto' ff)reign individual.
" 1/ong loo percent.
ItBng foreign individurl
included sa Foreign is not
&ank Liberalization
Sten I e). Ho. Lax, punrdr ri
ihe*does that?
t gng nangyari !:a=i.
si Chirnan sinasabj. sa FNB at saka
nrla na the ldFr
Sc, Plr, X can have r.,oting talks only s1 oenership,
J.ights . . .
EIL;AHEHAI- Li_rI.!FEFjE IIi :F,. {ll...i ,
!-!h l_iEtrtEh.&i_ tJAilHINE ACT
i llfif,tt{ I Tl EE O}.J Fi..lt\.! r : j *r1lg_, F
1I Afrli I L :.i.fi-ir i
MAt..tLlil, I iri i 5EI,IEDIARIES )
ElaiiAl'ltrti.i r VIII _ ?
i:l-tA I F:t,lAt,J t,:{}tji r. j(:_ itno nEf F}:$}ar.r anq

anB mo? you nill
nol{ gran t f lrr rher Eit,rr t t.t -
REF. = it i= =i!_prdy .tr,ier*d in the menner

l,lf-lF:tsi.lil
of
reglrlations lyon* m3nner t]i orîner=h]p.
I .iust.. -
CHAIRHA RO[A_ .fhat.= riqnt,
J dcrn.t like nga to refer
to manLtal of regul ations becal!sF
I have not str_rdied tne
nlant.tals and I am ncrt the Ednqkg
5entr*-l , gtr, if yttu HAnt,
we can revieu aIl the manlral=
and allret. The Feagon I
htsitatr is becau=e I don,t like
tc be drawn. _; Let.s bring
in the Bangko Sentral agal.n_ Let.s
hawe a briefing on that.
Let's have al I these ,nanrlal6r tf it iE
bothering you_ .he,re to ctiscuss the nsnualg. I
d{]n't tike that
ftEF , I guess what I am illst saying is
I'IORENO.
the laar
talks of ownrFship. HFIJEVIF in practice, it,s
not linitec,
tE trrlnprsfrip kasama ang contr-o.l
_ So. r,,!,_ra t I am saying is
r.re
might iust as t",e I I include
the rrord. ,,c(trntrol.,. to
t[agt any
o doubt .
CHAIRIfAN ROCO. Let. s visit

it afternards. Let,a go to
the others. Anyway, ntrt
only the famity groupr ar rrleted.
O! itong family grcrup
ctrntrEpt, lnay. problerna ba
iyr,n?
Corporate s torL h(ll c, i nqs..r
REF- l'lOREN0, Sa. i,^raling
cc,m{ron 1ai4 hd?
CHA IRt"tAN E0f,{j , !]a _ [J thsrn:. anq legi tirnatc dehado,
=e .
eh"
04s
BICAFIERAL CONFERENf,E ON THE EEhIERAL
BAIiIF;IhIG Af,T
{f,NHf.IITTEE oN BAHI{S AND FIhIANCIAL If.ITERI,IEDIARIES
11 APRIL ?OOO }
/ EFT I AHZON / VIII - 3
REF. norm na ito ng Legislqti.Bn

ngaycln t eh.
CHAIRT4AN ROCO. [therwise" yaur $ife is dehado sa
girlfrirnd no. I yang concept ne i.'ian * prnaqbt:tohan iyan.
(Laughter )
FEP. fluREf,lo- Trerrd tt j-nq i io qh. l'rend setter it0ns

=e
comrnon I ax .
@ [HAIRFiAl,i FtrC0.
] di tra.a irthat FFt ies te your xife
tra
shc'tlld apply ttr yot]r girlfriend- g. srder and control dito
sa corFerate gtockholdings by the ssite family grclup
Er Earne
grot-lp sf persEFls sh;tt be Eor,s1deFeo related
interegtg and
ftLlst be fl.rl t',, cii=!:Irs=ri. il_ r:r:rFlrate g'tt]chhBldingg,
okdy
iyon ss iy$?
Atrtharitlr tn :'-erii.stei-r rt. i-:,. rrliay n3 goerd of
i"{]r]7
Directcrs" =evEn, rqe:; i. rrr rrtt iift-err.
IHAIRl"lAf, t AUEr:l_ " i"iev cji pererr=:.;,,a ang HBurEr at SEntte
verEtcn.
.o CHA I Fl'tAI,J F:trtti, ii==n.,r
{:HAIRl,lAru LAI-IEFt- . $a fiLi.rhFr^ ri i ii ; r_ertors?

trHAIftt4Aru FnfF" rj" Jrlenr ELr5tl n-!n:/,r.i
CHAIFI4AN LALEE! . tdE hlerp rhin|rnq
*f S to 13 inctcad of
7.
CHAIRT4AN RtrrO.
rtir. tirat'= ihe st+ndard. oc'.
That,s the
Stsndard - The reasor,r we
made -: i 7 irecause gf the
2. nayroln
ba kayonq independen t fl1f-prtEr
I
qw
/l
047
E ] [:AI"IERAI* COhIFEREf{IE ON 'I'Hf GET,IEftAL EAI{I.IIhIE ACT
i I]DHT,II T I EE OI,I EA},JI.iS AhIT} FIf{Af{[IAI- I H'!'EFNED ISFII FS }
1l AFRIL :r.ttnj .. EFt'I At'lItrt! .' viII - 4
itHA Itlt iAf{ i AUFE|., " l,lala.

cHA I Ft'tAht f{{l{]t " l-1. i:r-ing tsin r. nn e penden t directorsr kung
lilirna" deiawa rr-rt t1't rl.!.L-. i rilis n=nden t na. Kaya nanin
g rn*r+ano ni tr _
CHA I RI{Afd riUf.tLi.. , r,,!Ear-!, i':,:L ;:i=r-r

=r_id to the idea...
i--
CHA I F:I,IAI.{ k{ i{*f,!

" Li; ,r', r.r!dE n:=nnErrl I CrfeCtOf.
CHA I RI'iA'! ltil.li::F! . tr: rnd=r:qnasnt or rndeBendent

di rectarq .
[:HAIFlrlAll' h-t_i[i.i " +;i], t]:ir!:rlrn, ih=l r+= shonld discuss that.
f,HA I llI.iAf.J Lrit_]F;L!_
= L!- .
EEF. F1trliElltr. t"jr" {hairr,sn*
=.= !=nsie vrrsian may linit
ba ga gtockholding= sa fafirly gro.-tEr= aFlcl corForations?
cHArR*Af' FtrC - r don i ii-i1..ii
=i'. rrlsld na yata, eh.
REF. flOFEtiO. $i=cla=urp lanq, t.rslsnq lrmit?
CHAIRI{AN ROCO-
Transparenc:I ng anq ancl natln. Iyong
sa independent directorr metagel nernin itong
ano, plrtntr,
tnahihirapan tayo dito Ea independent
drrector. lthat,s the
.o prob,}etn,r, tii.t rector? ftight now kaci n$yrdong
ano, Erh-.. Iyqfi don't we Eddress that concept?
gr anong c'bj ec se independent?
CHAIRmAN LAUREL. tjhat is the defin:ti(]n
of independrnt?
FOC0_ Other than offirer or ernployec,
CHA I Rl"lAN
subsidiari.es na lang. In AmPrican
trBn.ept! it is an t'utside
af directer_ They are s|.tpp(fssci
to bE ihere not beceuse of
th'i'r stockfi'ldings
' bLrt trectsLrse sf emrnent quar if icetions,
E I LAI-,EFili. L.rlt-iF EF:i:.inl.E Cll 1l'iE ijElliEiiiit. r:r.lhJi-It{E ACT
i illlFil.ii f IEE lllr! FAt:ir. S Ariii f iill*i'ltiAi_ ii,tt Fiii,lEtIAFIEg )
Ii AFFiIL :L}i_r'j I tF'! lAl'li-Ul,l , IJIIT _ q
ei ther as trr(fTe==irln3i. *Ltq,i- ic}r. ietrys5. academic and since

they are not really.
1t = the rsncept of rnanagemrnt and
ownPrship in FUbl irl y lieted aJ.n{: =nd coFporaticns are
slrpposed ta be separate "
So. when yeLi have cutsider directclrs, they lsok
et it
rnore obiectivelyr but they can alway= o.rtvste them" di ba?
They are a l|{ayEf.outvatecl, Ertrause kunq masyadqng tirnbre,
@ kung ninsan al'requj.rerfiEntE nakekaligtaan pag
masy'adong That's the conrept_ -
CHAIRT{AN LAUREL . .I see -
trHAIRHAN RUCO. That.s the ronceFrt,

CHA IRI*'AN LAUREL. Fr_r t in actlral EFactrcer Hhat Hill
rEally haFpen is, it Flill be tire ma.jarity designated
i.ndependent kunc d i rector.
CHAIRI,IAN R0CO. Bf caurse. hindi mo maiilcas.n because
@ they elect s<lrnebody whora you are tramfortable rrj,th,
a
professoF! a lawyer {fr an acrolintant* but under the
.a Corpr:ration L_Bw, Llnder the duties Ef dircrrtor an outsider
has
gFeeter dutie= af diliqencEr" Sc, I
mean o okay lang Be kaniya
if you hire semetred), i+hn i= sri I I i.rig
. . In other trl rreh their.
HoFds. anq pLr++edenq i _=!-iE Ea \! r_t
J Js a stockholder_
comptrol Ier. anc =,t_r_sLle sa al:in. i;ai.;arba
_i
Eng dilignnce
dtfined- rhat's ttre slir p.+i i_-f ltis".. l,En
*,hen pen Central
collapsed and thp DrrtsidF nf the
iiir!,i!-L.i profetsor, did n6t
say anything i.nen.ing f r,il1.... r+e.t
i fa= bres held high grith
BItrAFIERAL EENERAL BANKINE ACT
(EOf'IT.IITTEE ON I.FINANCIAL INTER}IEDIARIEA
I1 APRIL 2OOO EFTIAI,IZON / VIII
I
- 6
higher culpability. Pareng hindi mt] sleiwasrn. You niII
never grt a I a$yer na kalaben n. Yo. You HiIt never get
somebdy }{ho rri I 1,,. be not in your conpany.
But then his
duty. - .
TDs LEOilI SA E. LUCHINE TOSK OVER. }
.o
:,
I
BrcAltERAL C0NFERENCE
(Conmittee on Banks
o{ TTIE GENERAL BANKTNG
"zilr;ffirlld-Financial ACT
rnternediaries)
^n'ir-ii,
CHAfRMAN RoCo. (Continuinqy .. _ rJuty
is precisely to
be looking at it fron the.-,
either pub_Iic sector interest
or str j ct lar.r ot. f rom
strict eeononi c.s ot: r.rhatever-
REP. MORENO - Actuafly sa Revised Critic
Act sa
amendment natln andoon iyonq independent
directors vhich
will apply in case the bank
is listed.
cHAfRilAN IAUREL. So you
are in favor of independent
.
REP- MORENO. As, nas naganda iyan_ Anq
worry ko doon
sa walang f irnits, f arnily groups
and corporate
stockholdings, wala nang
lirnit. Mahirap iyon.
CHAfRMAN L,AUREL.
Open, open the door,
cHAfRI.{AIt,ROCO$}i
But it,s the Darket that rlll
deteruine.
'.
t tayo dito. you cannot go
beyond forty ror''lf aDilyf for individuals.
REp. IIOREIVO. I{ala
ho sa Senate?
.o cHArRllAI{' Roco{qri*flrr, It1o, beeause al
I rules vhich are
applicable to the foreigm
applies to us. If you
want you
can repeat or you can
put, but hrhat J,n avoiding
are all
these 40. ZO, 30-
REp. MORENO. Actually sa plano nq nonitoring
iyon.
CHAfRIiAN ROCO.
f kno!, but
if you are confortable
with that measurenent
then you Ero to the timits,
but to ne
the narket viff decide
if there is somebody rJho
r{ants to
05tf
BICAJ'IERAL CONFERENCE
ON THE GINERAI, BANRING
(Cornni11u" on Banks ACT
and Financiaf f nterrneOiaries
Aprif 11, 2OOO/ Ieony/IX_2 )
or.rns 60 percent of the bank. -l_et

him . The law Cannot
protect the foolish. Inagine, you
want to own 60 percent
of a bank, It,s foolish. Lahat ng
utang exposed ka. fn
fact the
I a bank with it.s possible
holdinqs. I nean..for a good businessnan
because then you
leverage your noney, Hhy do you
want to make taya in a
bank vhen it's so easy, you,re
so requfated- Let the
market decide.
REp, MoRENo. Anyr{ay. I

suppose naqanda rin if
regulation will really cover that-
Roco. But ro ne r cannot visualize
crrArRMAN
anyone
who wants to own a eontrorling
percent, an individual, ha,
a eontrolling interest in a bank.
brrt if he does, and then
he telts everybody that Lucio
Tan owns 60 percent of
this
bank, this bank with me.
He f li.es away the narket,
.o isa, eh- Baka utangin pa jyong
paisa-
sixt.y perclnt, di ba,
but
let hirn. the lahr, you should
not worry about the foolish,
I'Ve shoul.d on_ly worry about
lhe rat j ona te. But if you,1.g
Irore conf ortab_le wr..t_h
the I irnitations, sa akin
ano, I do
not see it happeninq.
fn fact anll ndngyayari
doon sa
linitations there you go pag
talagrang sugrrstuhin
everybody
earns. Then you q|o abroad,
then you go.,. it,s
so easy
anyway to lfo around.
Ilayaan natin. Somebody
foo-lish has
0
BICAHEnAT co]{FEREl[cE
(Connrittee on Danks o{ nG GENERAT BANKTNG ACT
eprir ri, zilril;"H_Financial rnterrnediaries)
to own the bank
CHAIRMAN LAUREL. fyon naman yatang independent

conmission for as long
as sre are not nenber
a of
nanagenent . . .
CHAfRUAN ROCO. yes.
. or an emp]oyec .
CHAf RI|AN LAUREI,
CHATRMAN ROco.
Alright. you just .
force to get
somebody who is not rotalLy depenclent_
CHAfRMAX LAURET, - Who rnay even be errtitled.
CIIATRMAN
Roco- of coul:se, of
errrrrse. He hinself
naybe entitled, .di ba-
Nornally nalnan you are qualified
r.rith one but your by_Iaws
may require five thousand
shafeS.
so your try-laws you can
afso protect yourself and
identify,
but the independent directors
must cone frofl acadene,
fron
Baptist or rrhatever he
vants.
.a) CIIAfRUAN LAUREL. But you are
not going to.,.
CHAfRUAN _ No, f,m not. Okay. para
ROCO
every bank
Lrill discuss their,rir concept
of independ ence. Bahala
na
sila. Ife would
orce to deternine.
sariling kayod. Sari_
Because ,. Eoue
banks wi_L_t
therefore
pu..blicize. Kani
neron kaningr national
artist. eh. Fe are
nore trustnorthy
because, He are
a national artist in
Board. Siya di nanin pinauutanq. the
I{alanq pambayad, eh.
ow
BICAMERAL CONF'ERENCE ON
TIIE GF]NERAL B^NKING ACT
(Comnittee on Banks and Financiaf fntermeOiaries)
April 11 , 2O00/Jeony/IX_4
CHATRHAN LAUREL " o, ano, oca?

CHAIRHAN ROCO, Sa independent, i"/al a kayong problena?
CHATRHAN I,AUREL. Wala.
CHATRMAN ROCO. So, sige. Nou, take this problen.
CM]RMAN LAUREL. So iyong nurnber of directors ve
can...
CHArRIAN ROCO, Puvedenq pito. Oo.
REP. MORENO. fyong usual ano, in the case of
nerge
o banks.
CHAIRMAII Kasi if you look at the. ..

REP. ',*naging problena
iyan SA issue ng
nerger.
CITATRHAN LAUREL. Kasi if you are looking at rural

banks we need five .
CIIATR}IAN ROCO. Ah, okay-

.o rura] banks?
t{hat is the ruLe now sa
CHAfRI,IAN LAUREL. canoon

din. corporate, five-
CHAfRMAN Roco. But
rura.l banks are not auended.
Under here, "Rural banks
are covered by the Rural Banks
Law", djto sa Sectjon na
ito as defined. Bants shall
be
classified into rural banks
as defined by Rural Banks Act.
So we would not rnodify,
but dito, so tiris one coverE
colrnercial banks basically,
universal and conmercial
banks. (
os4 /*)
BTCAffERAL CONFERENCE
ON TTIE GENEML BANKIiIG
(Connittee on Banks and ACT
April 11, 2000/Ieony/IX_5Financiaf fnterlneOiaries )
All the oth ^by'special law. Thrift Banks,

Rural Cooperat.ibsf*BankE, fslanic
Banks.
LAUREI. So isingit na tang natin

CHAIRIIAN
iyons
number of independent directors.
fyong concept natin ng
independent, not members of the stock, ,no.
CHATRMAN Roco- rto, ito. ,,An ,independent
director,
shal-l mean a person ot}er tlran
an officer or enployee Of
the bank, its subsidiaries or affiliates or related
interests", officer or ernptoyee.
ROco- So it,s fairly easy.

CIIATRMAN
I nean. it uas
not neant to be strjet, but it,s
barely easy to circunvent
if you are minded t..), but t.he princ_iple
of having an
independent direetor is
maybe an improveftent
also. Ind
it's qood for peoJrl e to ofter
mysr)lI. maybe we will
becone independent di r.s6,1_oa"
.o REp. MORENO. So h intli
of some contpanies.
prrwerJe j Lonq nga appointive,

efective itonqr.rnga ofi.icials.
Meron ba dito?
CHAf R.UAIV ROCO
- S a rura I bank .
REp. MORENO. Hindi

kahit saan-
CHAfRMAN ROCO. Ah, ganoon ba.
REp. Ir{ORENO. Oo. Meron iyan sa existinq lat{, eh.
CHAfRITAI{ LAUREL
- Not in existing bank,
REP. IrtoRENo. sa
cenera] Bankingr Act
a . Erran ko kung
n ":5
BICAMERAL COI{FERENCE ON THE GENERAL
BANI(ING ACT
(Corurittee on Banks and Financial fnternediaries)
April 11, 2000/Ieony,/IX_6
na-delete na.
. But it , s not a prohibition sa atin.

CIIAf R-tt{AN ROCO
CHAIRMAN TAUREL- f don,t think

.so-
CHAfRMAN ROCO. S() we are not pr0trjhited fron being,..

Sa rural bank ang a.l.anr ko r./a Ia t_ayong prohibition. ft ,
s
not a prohibited offico for conlJr.essmen and senators-
REp. MORENO. So T l_hink by laws. rienator, dito sa
existing cenerai Bankinq Act. ganoon?
CHAfRMAN ROCO- Meron, qanoon ba? Ian, meron ba sa
General Banking law?
REP . tloRENO - E]ec c ive ;rn<l appointive public

officlafs.
coM-SEC - FEDERTZON. Sa Section 1B meron dito sa ating
version based on existingr law, Section
30 of the General
Banking Act.
.o clleIRliltN
coM-SEC. . Tinanggal natin.

CHAfRI.'AN ROCO. Tinanggal tra natin?
coM-sEC- FEDERIZON - No appointive or e_tective public
official on a ful_Itine or part tirne
at the sane tine serve
as officer of any private corporation,
except in cases
where such services is ineident
to finish such acceptance
provided by government,,,
Section 30 of 3J7.
05G
BICA}IERAI CONFERENCE ON 1IIE
GENERAL BANKII{G ACT
(colrittee on Banks and Financial tnternediaries)
April 1J., 2000 /Leony/IX_7
REP. MOREITIO. pati director hindi puwede. $ection

30.
CHAIRullN ROCO. it's the

So sane. So that.6 the only
Section 30. Okay.., Fit and proper rule.
.o
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l:1,r,, n l;l fll(:.nr'Jrcnn 1;i 1:: flnq pr.til.:i. 1:;i l.;"r,i'
,:{h.F " i"i{:ilii[.].tfi " i'l;i.l_ r:1. _r ii:i. ,r.n;j rr:* L i::r:i.r r.iJ !-fri:Iri:3 -
{.il-ltr.l.1:::l'lfit.t Frnilti ,, I'l* .1. * .i a l.,r;i. ,tr-!L: rlril+ hn*rd rnt:,rn*.. tr.: it,:.r .1. ..r
ri,i .i: :i. .1. ,r ..
i.l|'li:i i ,: 11lii,l { } ,r',t rl. ::: i ii::r, ir,;, .i. .1 i I ., !:! t:. .i. + ,.
i.ll-Li .i. l:;r l'!r:if.l i:;:;.ii..i.i,. iI: 1it :!. i.ii:: :!, r::i:ln1:e'ns:i{:i.ciri, nthtir.
,:i*tiri.* {' :i l: i:; ,,
!:i:I:.1:! ,, irii.j!r; i: !!!i r ., tjit:r r:: i.:, ! :i i:i i:!r:r !::i i:r r,: *h"r-l.l n*t
,r,
FXfi#ercl i:11.,,
.o i.ll !jj:i L l:,,1,J.r:ri.i ::.i.lit,:,. \..t!:,, t,j::..1 ,.
1tu::'! iji,:r laq,- :i t.;. :1 i t . ::t i i:! :t.i: i;i::i l.-:r):, i, :) t i-t:.. i .1r:. rhe1,.l,
';j
..
n$t Ex l:t#!g!r
:::1 , l'!r:: ,, ti q;1 i1 ir i 1,,;r ., it:::. i , ::.: ,.,r ,: i, i ' , " r',:-i l!r'i ,.:rF,:i h;r .tayff .i. ,i,
cl i
,
ii'ii:i, i:i.l:;:!.ji i.::

= t.i.i:!::tir.i iiii'iirj tlilFl:l)
EI f,Ai'iERAL f,OIqFEftET\iCE tlfll iHE GE'IE|{AL FAF|F.
f f, Hf.II TTEE fiT,I IANHS A'{D FINAhICIAL
f h{G A[i
] ru TERI"IED I AR I ES )
1l AFR I L ?ix-lr:i / EFT I Al"tztif,l / XI - I
CHAJ FI'IAN I{ECD . i [Jon tinlring I .. {n3Y problene b* tayo

di tI'?
F:EF. I'l0REhJil = l,le=aan n= ta,,,el
CFIAIRf'lAt{ Rrjtti - itcirc, Fit anrj Fi_s5e|- RLrle- A rrgular
gdmtllEr helimhan:. Fil i I 1_t,ri
=irl-riFi:i nii
t$ =LlspFnslon? Di
ba. fre shat-ild l;e,i ,l}.lfrr anq.
=]gr,ira}" =_r Flcfie:/. there must be
SOmstitinq :bfl-Lrl {f J-,nb i Er _
=
REF'" l'!{_iF:F ltl,l _ i.,::,,,1-- l r-==irtenir+ .,rj.f , eh. _-
f,Hii I F:l'lAl.J iii.t...ri. !_.rirlif i= :r i j-:ir-r:.:. ir=rr.ir dits?

EFF_ tauFa:r.ii . S1 {r1,l rn+r i.e+,. r ,::.rnnl tng dsw,
=
Cl-lAIRi,iAl,i lîli_ifi.;1 , i_l,r.r-.!_rn i ri,:.rjr. r! t
f _,r.t iriEctk dito eh r.Yonql
bar to el.ienE and ,t'ritf e*ineF:!t !l=s: ri rrn=
"
CHli I frPhil.l . l,r[i-] F.=arri: rr.nn.,;

"
CHAIRT'iAilt LATJREi_. l..ay, ica. i:._rn eir.
REF- FlORElqtr. r don t incr,r
=a l{eri=e, versLon medyo... Sa
al'iin. iyEnq Srnate vE|-sien very iF:!f, c htforglard
= doon sa Fit
and Frerper. S;r atin iection ll" ni*d,in...
Again, ang ano
.o dits i= what extpnt af pauers shclrld (ae
give the llonetary
Board with regard .to disqlralif ications,
spprovalr. gt amln
kasi sa House. ,v,eqo,fr,rDn{xnay roong hearing paregreph. Ba akin
okaf ,l
t .yot-r *ant ',af ter due heering.' ,

mahirap iyon eh. ?olr crrFFle the Flonetary Eoard.
Siguro if
).c,lr can lrmit this, Hr. rJh*irman. sJ fLt and proper
rule
parang it. s fairly ano.
CHA IRf,rAN LAUFEL . So, gtr+ , i" tonq Sen_i te versitrn i=, pkar
044 v
$ft\{f
,'.-'': ]
li I l-Al'iE lltrl {-{ilif l-iitrl,i,'r i.i!.i i i llr '.ia i.ri.l.,!:li rlr:i.ii I l.lG A[T
i tlll-lr.ll I Ir[ iJii Fi:i,iii i!l.i{i i: ll'jHi'li li+i'fii i.-t'lEliIAftIES}
tl AFFill .:l{-,'-t'-, i: l' I I nj-! i;-ii,l 1j - 2
|.!iih YCL!. *nq t-:nd.: ;,: i!_l t.rI =-i ijj:-!1r :rrc nigsinEit nit(l eh
dahit Ea pr*blem; '1.1
_i a _q* Li=nr* t-riinina_ Eut ako,
Fprs{:rn=11y, r*e sh{]l.!i.t ca.re ihe t'h:rrer,ar;, gt]ard the authority
tB dct this. !..asi ni j t-J l.glii nEl-1.i irrjn= iney jLrdicial revir$,
tra tayong sinagahr,
REF. f,it_tREt'{U. f.tindi &inetEte i,leieiE! iyong judicial
"
review. althcLrgh of that r= prudence. c6LlrEE:
CHAIRHAN ROG0. Oo. wsla nernang imrnunity. Deleted
naman. r{ale ng-

CHAI :go ttr' colrFt - I t wi I I be revier*ed .
di ba?
CHAIRi4AH ROCO. At safr.a anybody whtr lE disqualified,
rrmoved ar suspended can alsn slre. Eh" Ang hindi lang
naman nahghabla diyan kung ialagang ffrsz l,,a=alanan, eh. Ss
jrtdicj.al sy=tenr natin. kshjt rnay ira=alanan. naghahabla. eh-
{Laughter} }:Lrng minsan sits pa anq rnatapang et-}.
CHAIFIi|AN LAUREL. So. ano. [cao eh,+t do you think?
o FEP . FIORENtr . Sigl{rtr i tong sa . in the r-r I tirnate paragraph
se Hr:use versionn breader itang ea anu eh ga last paragraph
5A Senate versi L1n _
CFIA I E|'1AN Fflfti- Arionq ger:tieir!

REF. l.lOJrEt{[. Sert_ir:n ]l . in=i_ i,rou ld be pegr, . .
beginning Faqe 16. ii. cne EeionrJ io i-F ia=t.
rn determining
*+hether. etceiera. str:eiera, i,a=ama li,.Gng,personal
buBinelrt
rel ati0nsht tlF
hil,"flv
/v
ff4
BICAI.IERAL Ohl IHE GEntEFiAL Fr{i\it'It,{G
ACT
rTTEE ghr#FAillmnND" F rNA t]rAL TNTERi,iEOTARTES]
(EOHr,f
11 AFRIL EF"f IAFIZOT.I XI - 3
ROtrtl. l{o}r. l:ung gust{-r r,/a

CHAIFHAf'l l agyan nat j-n .
"afier due hearing.,, A bsn!: rjlrecror .:r af f i cer rnay be

d isqua I i fiEd . . .
FttrF. FllREllS _ irrtsta nrFranq rurrf I rct hllnq talagang.. "
f,HA I Rl'lAN ftO[t] - Fierrro.red (]r sli E gendFci hy the Honetary
Foard ar-,. Secause flrayrc,Dfl kayonq "-+.f tgr due hearing,, but
yflu rRay iie up the I'lonpt-rry Eioard " i}En ang ano diyan.
trBlicy ef fect- ycln r+il1 ile if- LrF, da ira: Het(f kasi
imaginr
naqdi- dr=pE!i.:{1 j.s
=.tjeajing yau bJrnd, Bn and you cannot evein
si.rEpend hint, i,.joi: =nq *!tJ:j_ i:|:i. L,1:!til.:=, mabig*t iyan. Dlre
haring is not j i:E. f Lri-! f r,:-na Lif t1-; pr: ii1=sse=_ In fect.
ak.,.
mas ql.rstt| Ji'r I't'Jr r.-, lfr, h,:rf r j !,.:rr -.-r _.
fl-lAIFt{A!i l-.a.ii :tiFi i j j -. rra -i.ic E!.liriLrilEt,

tl{A i Fjl,li+l,l i.iti :li. j,i:,-
j. !,rrt t- ..=,r=p*r]d
nila et
=rl=.
meql":ema.l i Erl.r.
=tiE *n* : ir=i_,r;. r:irrri. *i natin pakielamanr
hindt. are'l Arrq 5,rir"red= i:i=.1 !-rq +nri i j ? r,=i jnn dito is
after dur
hE*rinq" lhat = e ii i- r * rir I, ,"
: i El Fr
i,Jal"i Ea emin ang due
r* r_i
.o heari-nq- EnL, rir iiii- !r=i i irr-rIar r..r==_ r_irrq fit

and prcper, i.:
Ifitsgine r-tnf it and 1.liprqtrer- aiic {.iE _annrrt

suspend. Kawatca
tal aga naman qnq i,lnrrr:i:rir leai-d, l-r r.:.,,
{:l-lA I Fl.lAI'l LfiUhEL. i.et tirem q _,.r t,_-, .L1Lr!-t.
CHAI RtvtAt.,l ai$il8, SiqE ler ti-reic" l:ir;iler na siia.
trHA I Ri"tAl'J i_AUE"E,- . Ar--ri_r. tjcaT F.rr!.]=de, nr. 8kay.
FEF . t't0EFr.jfl _ Een r t= E,a _
CHA I Rt"lAN LAUREL

- Serra te ver_q t ilri ,
CHA I RI4AI{ RTIIA , On Sectrcn ll" r_ompensation artd Other
068ffi
FI f,+I-tHFA}- ITIIiF F F:F.I{!IL DFI I FlE L:iE].IEFJ*1. EFIIIT.I T.,IE ACT
{[ttl'll'lI r I E[ Lliri rrili{t. 5 fit,Ju F I l\iAh.it l AL I t'.t fEFiffED I AR I ES )
I 1 AFR 1 L :$i_l,r .. .t
EF t i At"ii Lrt'] tl - 4
Fenpf r-ts.
COFlFtt t TEF iitl,i-ii ! r:i.!_;, F E LiEi:. IZiit.t- :iE.i i. Dn I:. i.lala silang
cnrrn terDer t .-
LIFIA iPl'l+lil !.llifitL i:::c t i.r.:rr .i,: ,..
f flf,tt'l I I IFL EFi. r,:! r;F i r- t !_.trt_ I ;!-!i,i r!:r:,r..' pcr 1a si

' wa I ang
rt]|-rn LprF*r i.
{:t tA I Et'tAi,t ,r_Ai.rFt.i iift = f a-1- rr|J =
: .:.Lr . I io,
{lHA I Ff,triN F{ ti:t! . :11 -rli i:i:tr,
cFi*IRi,tAN i_AlifiEr- - l-i=tii r i.lE-= li=r'!etir..J, Lt-,rard whe F,i I I
prescribe dlrties 6rirl rE=trEnE1lli i i t: e= of dirttrtorg and
officer5. -.
FflCD_ {diia.t Cn r:.rlr I q=*t.i tirei,s an inwitation
CHA I Ff'lAf'.I
to arbitrarinrss- I.rlEgj.ne, in addi tion tc thr provisions of

by-lawsr the l'lnnetary F(]ard l E,r-e=crrhE dutia5 and =haL
resFonsi bi I i ties t:f directors and sffrcers. That,s
fantastic. Thatl astic. Hcw can they pregcrib ,ny
duties and
.o lsnger have
tE,'. as director?
. That's ccrntrcl of the
Eo, I ni I I no
banking
industry.
cHA IFI'AN tryf5-t' ,Hindi ba ivsn av ftasq by-la*s nila
kung Rn{f, ang d|.ttie5 and respt:nsj.
bi I j. ti e= -
CHAIRi"IAF| RtrCD. tra . a t EJFE s.r aorFc-ation code, They
are just csvered by laur_ But
klns yoLi y*i I I ask the l.lonetary
B(fard to pre=cribe the duiies
snd resFf]nsj. bi t i ties Bf
directors. na k ska taF:ot iyan ah-
FI lAt'tEHi:ri. t{itrFEFLt!t, L. lll,i illF_ {iEiii!:i.+ri i..rintr 11UU Oat
( l i I EE i_lill tsfii'Jt.::i At'Ji) i- I i'rAr'l[ t i.1l_ Itli tEF:i'IEDIAFIES]
f,Lil"ifl
ii AFFiL:i-,Li,-) r Ei: t J iii'il ,. xi - 5 'Jh!
CHil i lll'lAH t;11JRF-I . Sirrr=nq n:qh:qa.-. n.liong_.

REF. ,.ttiFElul.i- [rai.a i-entre] t,arr: _
CHAIFFIAI',I LAIJREL. Ernr_rng nag-tra=s nrttrT

REF - HORET{O. f,entFal Banh ito.
f,HAIRI"IAN RAEtr. Bake Bangko Sentrat r.aya naghihintay sa
lebas- ' 'I I :;tri,t,tr i
ftEF. ra ease ng suFerviEisn.

CHAIRI"tAN RgCt]. No. nc. nn- -l
hat.= an Bpprcssive rlBHeF,
No|4. banking $hj-ch is 5LtFposed to re r-rne of the mt3st
innovative and ,.,this-,is tahet.e ..re have cosFarative edvantage
r
Frer.rilI prescribe duties and rE5rrDn--iirj lities Bf directors.

Ano gila rnga bata? Hindi natin put'|ecieng payagan r.yon.
Imagine, they uiill
=aii Uhairmsn fiugusto Zsbel de Ayala
sholtld prform the f ol ltrr.rinq dlrtleE- Baka biglang...
pagmlr.nllrahin k syc] ng Z$be I _ rh: lismt nsfian ang may-Eri
sasabihin* pera nsrnari nenrin. Lio. h:ndj iraf Dahil aks naman
ang malrtlr-tqi. +nar.c F;r,.,iEiiaiii lin.rr, s3 amin sG lBng as
$e
.o don' t in i i-rrF ycr_r. .F;l,ta rr:hr rapan t*il _ ftr , llhairman t diyn.
Sabihin, si i-thair rr,rn i_as,rr*.i d trerf crm the
=liur.r i f ol loxing
dr-r t i e= "
rit,A I Rt{Ar'l i- f.)'IF:f ! ii i_ q t. a ;-.li; j.rq+n ftoco. ( laughterf

= =r
CHAIRI'lAf'J RO!:it.. r!irr*i na ai:c :.:,al_rj.r_-director.
6usto ko
pa namgnq magt.ng irrrjeLrsriC=nt dir-sri_r;r_.
[flAIRf'lAN LdliJF:F i_ Lira. _"
Cl"lAIFPlAl'.|. FtlCt-t - ts:i! + rn*i,rrr,=trf,!.r, "

{DS L.EAf,ttg+ g" L.ULHjtjG T[,-!r.. iiUER-
BICA}IERAI COI{FEREIGb'-OT*qfiIE' GENERAL BANKING ACT
April 11, 2000/leony/Xll-1
Hurtxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
CHATRMAN ROCO. ( Cont inuing ) rnahirapan tayo

partner diyan.
CHAfRUAN LAUREL - So wala na ito-
CHAIRMAN ROCO. Wala na. pabayaan muna natin iyan ke
ano, nakakatakot iyan sa bankers. Dati ang Bof keep
conmitting mistakes. So doon sa fflgan so many conpanies

just did not eome in because sinasabi nila they nust do
the following things. And they invest in saying, "It's ny

money. Eh, nalulugi claw kayo. Fih, pakialan ninyo. Ang
nalulugi nanan kami, hindi naman ikaw.',
O, ito Compensat ion and Benef il-s-
SUSPENDED; 2:05 P.M-
RESUT'IPTfON: 2:18 P-M.
# CIIAIRI{AN ROCO. So, okay. prohibition on public

officials, pinag-usapan na natin. Old law. Bank Branches.
o REP. HORENO. Ano ba iyonq Section sa ceneraf Banking
Act ?
CHAIRHAN ROCO- Thirteen.
REP. MORENO. fyong sa existing law kasi...

CHAIRI|AN ROCO. okay na iyan di ba? Anway, nala
namangr probleua, There is no local bank branches .
Anong page",nsai,i.natnix?
CoM-sEC. FEDERrZotf. page 20.

BICAHERAL CONFERENCE ON THE GENERAI, BANKING
ACT
April 11. 2000/leony/Xll-2
LAURBI. Ah, iyong outlets for the sale of

CHATR}'TAN
financial products.: or AfLied Undert ak ing -

REp. I'IoRBNeflfflgii[ihs$ianq tinatawag nating convergence.
CHAIRMAN ROCO. We don,t have problerns with that.
CHAIRMAN LAUREL. So, sama na lang tyon, okay.
CHAI RMAN ROCO- Oo, ilagay na iyon_ ryonq bank are
subject to prior approval.
CHAfRMAN IAUREL. Okay-
CHAIRI''AN ROCO. Bankingr days. Three (3) hour6 a day.
Pati Sundays puwede rito, hindi ba. hindi ba puwede?
nay open for business on Saturdays, Sundays or
holidays...,,
CHAIRMAN LAUREI,- Ang diperensiya lanang we are
mentioning offjce horrrs instead ot banking
hours,
Natatandaan ko iyan eh. which is realry
a difference of
.o three hours
.HATRMAN ROCO- so lrapit.o anq qus to ninyo dito
sa
Section 20? ,,fn additjon. barrks or
any of their branches
or offices may open for btrsiness for
al: least three (3)
hours a day.', Three hours a rlay,
o rli ba, okay na iyon.
Sundays, dati narnan bfue Sundays
tayo, ngayon vala na, eh-
CIIAIRMANLAUREL. Oo- Reportinq requtrenent
lang ito.
oca, okay sa iyo ito, ,no.
CoM-sEc. FEDERfZ0N. fyong
nakasingrrt sa atin, bank
06t'
I
BICMERAT CONFERENCE ON THE GENERAL BANKTNG ACT

April L1, 2000,/teony/XlI-J
xxxxxxxxxxxxxxxxxxxx x xxxxxxxxxxxxxx xxxxxxxxxx
hoJ iday-s, section 85 or the same sect_iorr.

CHAIRMAN R(X]O. paqe ano ivon?
COM-SEC. FEDERIZON. 21,.
CHATRMAN ROCO. 2]..
REP. MORENO. Separate paraqraph ba dapat 'to?
CHAfRIIAN ROCO- Sandali.. Tth is is where ue frave

,4, conceptual problems. Okay. sa banks or quasi-banks...
Ah, puwede mo na..,Can f have the PDIC I aw? (Lonqr silence)
C}ATRMAN LAUREL. so saan natin isisingit ito?
CHAIRT.IAN ROCO. Siguro separate paragraph na.
C}IATRHAF IIAUREL. Under the same Section?
operatlon?
REP. MORENO. Hindi ba puvede dito sa Section na ano

dahil may duty+silar.ito ,return
.o CHAIRMAN LAUREL. Chapter VI . Cessation of Banking
Business.
CIIAIRMAN ROCO, Anong Section?

CIAIRMAN LAUREL. Section 66, paqe 24.
COM-SEC FEDERTZON. Oo, before 66.-.
(DS ROhTENA T. PENEYRA TOOK OVER)
a70
r'I,l',:r'' '
Il lt {lAi"ll:::lrlAL- (:ul'll:f i. Fil:: l.li.lE: fi ff |'ii-'t I T T tit:::

{.}:nm:i t [rlr* ori lirdlri J.;s* & Finant:::i,i]. .[ir.tsiririr+ci:i.._rr:ir..:,Lr
Apri -1. J. u i.1/J0{)./pr:n;*)rrn./X:t.[:1.-].
:1.
f::{ll"ll"lI ll lj:.|::. lillf::FtH f r-lt.{'./ j:i::pF.h:.1"i:{.]i,j ., i r.:r::rr.it:irruinq ). . , he.f r_rrer
C:l-lA:1. |!1'lrrl.! fii.li.:tr 1:ir...:r::.i::i. rr.t i:+ iiir{,-t i.:i'asaLr:i. r:irryt:?

i.lf.ffi.!. !1|'lirrl.! L i,l..lfii::'1.. .. .ll l:i,ri :i. l.:r,,
l:{:1!'ll'!.!. I II::!:; i:;[t'i:;]:: T l:,;.i.? i:: i:r lil:li:i1..,:l{.1i.' ,, i:ip l:},: r.n t ql liect:inr}i gif..,
'l lA tl:ilrrr:r,tJ ,;i.ii r. ,. i'::,..:,.i i:.,
f
|
. ,
i . i tr.:- i :i , :,.
,
a,..:r li*rf ],lq:zan fl:Lnyn :i.s
l:i.t,"r i::i.It i:t :i:.t.ll'v.:i. i::ii;iii ,.
(:l-!ff.l. fil'lr-li.| i- i:.ii.Jf: I::.!.. ..'r.Lr.r,;:r i.:, !..: iiil:-r. :i.:i receive}r!!iht-, l;1,,
!:'t.ttl,'d r+ n.,r Jit:i etir,'t:i :itr" I'1,.. ill.:;i riri.:iri., ::;..,-! i-i?cFiver.r:hip.,
{.:l"lli.t f:iFl{:ll.l l:i:{.:i.:i.t.. i,:i:!.;* :i. ir.r t-:r. r..r !:,i:;:i. ;t q anni ba F..:,r i.l:a
l':Lrl ctfii] il.flllt,:ri:: i:,, i{1"- iitr.r*.1: 11i:r.l {:iii .i.i.i i* .l:he i-efeivFrhip. l"lq1*
(:a.1.:ihr',jr'trrd :j,.1.{::,, ii."ij,, i.la.i.:ihr+.i:i+r:l :i f i::,.
Itli;.|-'- llLl!:ll-.:l'lt.i - I'lr-.. t;h,,r:i. rrrrari - Fi.!e{lrj!.irJ i*-r:ng Eientence l.i.;1
:1 1:o {:Jcl1r}cl ::iii,. cr:r-r rJ $:fin tr.*ri rr,.i n pr-e,riei*.it !.r.a:i t.- i:- i iln nq ,4ic:t:ifin :O fif
' rc+ lietr.,r'tr,: ,,rF:r'tlii l;,ri,, ,,
{.lf.lA.[ l1l"lA,'l ,:;]Ut-:{-i.. IJ' l: ii+:--:. pt.i l::.i.:i. r::.1..;, rrirr$r.lncecl ,,,,.
.o It#:F " lrlflltHhin
" F:i.r:::t fiFntencer t;(i.k.* n.f
",,
{;:FIA I tltrtAhl - ,. Crrntinrrnr.rsi.ly fclr mcrF thdn iiO dayr*
i{:*" nh" 1' 1 thr.1t 'si t/, h;v Fttr rl"lman d.:rys ancl hClltrm
1*n6 si{j an(]4 heycrncf 30 days, Ttqlnan
n ycr. l-lart cJr.rt:i es,, yllDq mrJa flrncticng
$f lhe h,:irr l,;,,. Ir.r oth+:r t.rnrrir,. v.rhs:n i-:r-.ry
int-FrrltFt tttti+;ir. .t:
'f'rtttcl.:inri :i.Lri,, li*c.ti{i:t.i l:i:[ ,, .1.i,,.,: s:,: ,irF th*ir

barl,lir.rcl
rJr.r i r*rii., liind:i
1: ta? fin r.! th*ri .l_hn l:,.:ir i.: Fh;{.1.t pjr;:ar$ .thr*
$(i-r'v:icpsj" tr::+rter.a* de+p**:i *-r.1r.y *rrrd *h*J..i
s.
,.iF{3p fundg, hjndi
l;ra. Arrd tlr(pn ilaqay n.1.lj-n* $i,r jd (::ith{r _t;i,na fjsnLr L te c}r la*rl:
0?1 1,4/
IJ:l:{.:ril'11:.Hr.\1... t_tr:}l.ll::[:.t:iI:.l.li.:tr:
i {.rilFll,ti:l ji:.1::.
(lnrnmi.ttcil* fin F*n l,i$ E: l-':in.uciai
.i:n.l{.,?r.,nrirj:i f,r.1.+sr
April .L:t :lt)O$./pilrr ey r.;.r./X l. .f I -.il
paraqritphr " hindi ha? In L-&ti:r': (:f h.rrr l_l rlF qrra$i *tlc1n l,i
$r*n tr..r I clr prrhiin:iy r:rnncntn ces etceterau
whfi tev6r]- :[ t
hn.t:iday "
ct.tA wan{ it xha1..l *r.rnmarilyo ficry

sir.1r.rr-o,. I'lfi. n
;"fit.I {::.l i:fiel J'.f,r;-ti j. t rnayhr* -..:gr.1- rlr.rty {Cr precj.*nJ.y

Pr'{.?s{_irv(n t { 'ha? ti.:r kn n,:n l.':arua j. i .l.anq,
f{f::l:},, I'iili.{i:.1'1tr,, F't.t l.** nt''r r.t p:,r,'rivi. iii.fi i'irt.j s;1 lsr-;t par;iqrftFl.lq
y|lfiq ,!ic] (:: [:;i r]n li l. "
a f.lAl:tll'tAhl ftnt,-n" ll.tnfie Sr:cti.on iJ. r rnRy reg late irr

ttt-rl.'r 1:t:, th:i.x ar:1:.,, cJn I.l{tt end.anqer thF intFres;t"
'rc?crrr.n clcl"
[:'rftvidcltJ,, hciHe]ver.,, tn;,t:, i.n c.{r,l: 4 F}t.!ede.
",,,. cj{:} F.rl,-or :i.f,
silt{}t.l.ld n$t bc,- slrallL heri::" :i+_ !:ihfiLl:i. (J hr.,.. ma;v, yfinctni ,nay c ]. rf,s.ri.]
tiittclt ti*r'i l':.:i riir j.n{tti1:i.il:ii:rir,, T,,rs,,l }.*i., _- t:i sec.tinn s1 ., q,irvr:ifi
tticl*q Fr'$',r:i.::icl it;"r .1.,:r*.t p.-.r r.,a4 r-,.ir 1:l_r,. l.lt- !i.nl.t.ll-,tt paraqraph
L|*
faliti ::i..t i:lr i.'!.,' :i. {::! ,, i_=.,Ji:,,!t,, l:* J:1n}..ilt-r::;!.1 a!.:i:, r!*,,
1i:
fn CaFF {f bfinl",
nr clt.t.rlii -'Jr,.,t!'l l,: rifl t:i i'i.{,-i:: !: !.rq: !..r,:rl r:i J, t::, lir...?!.i lr.,-11,!
I [rAr,,Xnq When thC,ry
t.o rtri,-r1.1,*c-l
n!{ir..,,+p irr];i
th,';i.r. i;i",1lliir!:t :::fiil,.,":i i--*iti., i: ltci,l ,l
l-r*. mnnetar/ ho.llrc, c,An
i. tr r::.1: l:ht:i1.. irlat:: i. .:.ii.,, {i,,_i...i; ?.-r,,rr,indi tfi -rh" hifidi ha,l
iiict ;r1r; tr,:r l,:iii.i ,rl.t {:i liliti:i:i i:.i t. : ,,r
.i.:
:t. t ir :, ., i:tq-" i.r:,,;ry4r .thfi.t pclftion
And
:
tit*t: iri,,r 1.,:r.-:, I ittr.:. l t.r:l;.i l.Lt::l: i::iii. i.'r.r .j ,-,... t:L tr.rti*n
:i
*nd pJ,dficf
:i. t l.lfrd+,. rr+r::r::i,,,,i:,lr-: i::! l:.. {t.i .t.i.r. ! ,,irr r t: :r. .l ,1alry
{::.le,tr nfi ,*n -C,
Fartc1l.,:., f:.ien tr',:r.l r,r,:,-.l.,ir; r,i {::{--,r.}.1
i.ir.;t r::- .iI r r..:i ,iic, , ,. t i. on , FctO si.nahi.
rlg lil*rrrq l.;* tjentr..,.rlL,, liil-,.i.L.r r,n j j:J,,
:i .i|Jr] !,.e,cet vg nflgbilydtd.
[:l f hffrwi -.,tc.J,, fir1{jitilrlAyri
r:rl.r,, 1,..:r t.ia r,r._l .tttnr .Jt:Fc,n:r. I.rjl.
r rll.t.
flL.:.lj:',, pi1t;;y;--1'1gi ,, l..lj. r.trJ:j.
i:,* r.n;:;. t:el.rd:i ni:; l:i iL sar pDI(:,
{.l.1llI ftFld!|..j l{L}{--1.i., }JFrr-::,t.r.:q
i:i.f .lit:i.: ri,:a. .lhi.q wi.lL1 i nr p* c.t.
a
012
I.J InAFlli.Fi,qL. t.Xll"lFt:RHhtf:fi:
{l{lt,il,t I Tl.[iI
fi(]tnm:i t t(. 6? (3rl f,{an p..s tl Fjin.lnc::i;r:L lntF.,rmq+dli.ar:iRt;
Apr':iil. l.:l , 7t)0#.zpeney raJ.{ it. -.ii
(:tl y(:Ltr' , " " ni-.,.eFE,a1 nfi)i.fnitj.n yanq Frct/is'ion beccrltse i.t :igi
(:(fr.rfi{e. f :i.ctht hetrar**n F,D.l,il,, Arr.,vur;1y .th,r.t *rre shcr-rld
" l,lem p
{:hs m*r'ii:i Lar"ti h,i:,'.rcl l-r+:rrar.r*,* i.t rii*1:.1.1 e* .thei *rqlnment. lJl..:ay,
** Sc.r *l;i t::r.r i:i.1. rin )..nn., r"e,i.i.lled .r-x :r(:ir.t,. llal.il.: ncl tayt: s;r .,
""
,rh,, tli:ii:i :it;,: i::r:r;:ri +::tJ .f r r:icr .i lt..n l....ir a.lar hiud:i tfi?
lr{:rr- f.:clqJF
{:).lrC L fj..lthil.l 1.. iil iij'f--. i._ ., !}Jct r,;:i.i.i ,;rr:I*'t .lhe $pnate vsrn.il:Jn
iJ,rlr:i.l l-,::i.I cr;:t r,,! !.1+ l:i.f.: t..ril.it:j 1...,,il:ji:t!. L:i::,iJi..r.,
f.:l-ki 1. !r;il'frit1 l';il.lt:i],. i...,.,.: l::r:ir- (.1(:]dt,,.,, +r.ri.i,,
f.ll'!ft t Fll'litrr'.r i...i'']iiji; !;:'r . jiJii--ii ir:r. i::i ! ij..niii,ifi :r{.inq F{:}{4er.s of ,i
t.ttr :i. vr. t. *-r.i l:r"rr.i I.,: ,,
l.:l"la:!.[ l;il"ldtl.l Fl{..ti.'ii.. ii il i:r:::. :i ,i]

.;; i.r*r.:nr '.r.i ..p{*riiti(},.iE
1:r
r.rf r kr&:Li1
Ita.lr:rg eJi l,:r:rn a i,:r..'(i t::i.tt,i:ter:, .l,_?

_,r{:i l!-,. lr:t.i.}rJi ltra. F,erciv*1"
'I lttlgtil n.y tj! a ii n.J.i:l ,l,.ri,.r:j-, h r.:,i::,:. r i:: i.... trr* :innLr.( rej.nvF-,nt
*pr:r'"rt:i.i:rrr." .-:i* f 'J. I ..ir.rr.=.1: cl* l:i.y ll,.tn+ lii{ i,;r.tng rnay an*rl,ia lr:c1.yfr
Ii<\ F;iqt:l fi :i!i. d {:rrrF.--.,, .i l-:r-.:li.Fr ,_rre *.1..1.

" " " the,*s,e are Vef.y
'techn:ic*t.l ,, [i's.,.qe t :i.* ij,:rrr" {:iitt.l'.1 :i ii.l:.end to
@ rrilj.J- intervehla
r',:rnv(",fi 1 . re h;ri.i l.:.:i. nq f..;n i;;.i:ij.nfi ,,
.o en
It{A t: f{t'tAt't
torprir,i*rs in $nc.ti*r ,,.,
!...AtrRF:!... ,, Frf') i;J+..r"1':i.nr;.,d .f:ir.iancial,rtl.iic*{:l
FftWers ,itnfj comrn*rc:i a1 bank"/

i,i Ltnd(?r. , ,,
rit{l qaL j.nCl, where rjid
{JFt
thi *-r {-F rjf t lli. e,,
Cl-,4.f Rt"lAht L.AtJfiEt..
" $nmelroct/ {1!.r+r*. *- i c,nec, this, eh, tr,lha t
ii$ thr* f:in;rnc:[,i.1 *llierl {*ntFr.F,f-iE17?
l{nn1ya para te hi ft i. l,i
n*,, cl:inr.':,f irrp: * nanr:i.n,. r..r
ftFfi." i"lt;ll,fll..l0, yan .:n.tr cli perensi-1/a

diil.l:i ] cl*n sfi Serna.t(,.?
076/1/
i:j.1. i.J:.ll'ij:: I;:rt!... i r r:: 1.::lll'li'ij i i;r:.1:r.
.
':
l l l ,l ! : r i: L i: i tl i
i.l{:iillir}:i. l !:i|e il|-t hr.rri l.rili .llr F:i.r'r+r.rt.:i.,:1.1. Irr l: .i. !-

'::
{J :i ,,! r' :i. +it lit
-!
i..,-
t:'.i1:r':i.1. :t1.,, l.liir)rl.- 1:r.,r'; *':r j-,r... -.1. 1..!. -,J

iJ{--r'{!I{::,f!,, ari tri,r,e !:iiir r:iri+ f.r:r-r-rii, *.;J i:i:". i 1..:e.: i'!i:ii r i,,. t:"{ry .En.trd,
{.:!.lA.t tll.lFil.l f{{.]i:f-j. l,.tlt:i. i:li :i. r. i!r(:,;-fr f .i. qy:r:i. l,-, } {.! hfi?
t:l"l'jr.t Fil.litl.l 1...'iil.if{l:::1...,, liln i:i iie.:.. l.i,.. i::i1.r..i:r r;r .$nrratR vftr.F,,i.on?
[;l-lA ]:J:ll'lAl.i fir-li:il,,
i::;tli!:{,i :i f, ;:ni.t {iit.f :i.nf ang problerna l.icr Iiji:
"
i;ra d*f :iir:i. t:it::,fts{ }'t{rrq.i q:i' r.r= ar.r: r,.? l:tr; !-.1-. .tn rJec:icle whethr',r .t hcl
cf ct{':in j. {: j.rll :i. ri: q*i:r:i r!!- I,ar:i ., Lj l.iit,r-: r,,rr: .l rn,Rve it tct the
ntnti cl t,,r r' ,"' hr:r,,rr-d., i 'cli j.nl.t. i:i:i-:1.. r-,,:,., .l +:l .t hen, r,l- j, t+r it:, r4(n
!:ihfiul.c, rl{::, f. u(trr r..r' +[]i:L! l: l-ll* 1:,,

C!'lAIli:l"lAi.l LnLIRF:|...,. {.}r: o}ia}.. i,:.,ir r,,r'l
It Fal a. Flr. Chairn,irn

- "
Serti.nn :1.:.i., iii:t.jr:./,,
T:T{6' T RFIAN,I.AUF{EI. . $a lien*t* ;l0O lhrnr cffrit ,. "
(nfi [:rtl'lY F,, Trfq$2 1'fJ$ti CIVIIR)
.o
074
BICAI4ERAL COhIFERENCE ON THE GENERAL SANI|IFIG ACT
(COII}"IITTEE ON FANHS AND FINAFJf,IAI. INTHR].IHDIARIES)
11 APRIL ?0tlo ,/ EFTIAHZ6FJ ,/ XIv - 1
CHA I R|1AN lefiffiSllffi1 l6ontinlrinq J ... 1o{lz aE lonq as it is

pLtblicly listedr,:.the universal tran tl .nay awn LrB t(] 10{:rZ.
CHAIftI,IAN ROC0. Iyang thrif t h*-rrrf.r,
CHAIRI'IAN LAUREL. Sr anather riniversal banl.:. Iyon

na,!|anq H{-rLtsF, 6{:l FerrFnt laoanu i,if-je Lrr{*i. ,-nr_rblicly liEted or
not. Iyon anq diper-eneii;;.
CHAIFf,IAN ROCO, FLlt rnaqa l inq nsrr].rn .iycn to entrouraqe
FL{bl ic l isting, Are therr sti l l r-rnivers*l banlls that ere nqt
FLlhIicly lieted? irctr-r.r11;.." *ll nf them. I thinl:. arr
plrbl.iclT l iEted "
FiEF, l.l0REf.tfl , F.:Fl:ll..t j.i,t:niant j_ y i:;1 , .ifj-

t-f{A I Rl',141'l t...A|,lFiEt_ " Al-:" .,,i:ll.i t,rlr..i .i !:i i-y to prevent
'L
the
concc..,ntrat:LclTt i:i.f ei:fit-i(iiiti. i:: ili::i,...iii !.- .
f,HA ll RflAtJ lii-li_ti-r . ! E::: .
CHA I Fif4AI.; L-i:irjiil:L. I t-:.rt'E t |,ir: r+;-.:.r,i, far this.

llHA J[-jf lAf.J r''trr-'i,;. i],i. ,",+ I.i.E:r- i:r.:]i L:i::nus provision. if
the'/ are ;:r_rli.l 1,.. l.:i :j ifii{1 i-i*nr,,arfr i:l:i.i: ::.r Ij,beralization 1aw,
-r t_-
"
.o eh "
Ang iriL..r*nii::i:].:r..f,.,. nE t::j.r d:. l::: j. i.j;rJ-ri..l F,hi lippinE StoCk

E;<chafige. .t l cii..i:t L1!:i n,r.i I itre i:i:_-,j'!ri3cr=red, , . It sha I l
FLrtrli.cli/ li=L wi llr ;-, pssgc,rtt-1:.ieii t c.!.;
::: i::: iii I.i i_--han g e beCallse baka
ma-abnlish j.tonil F,h,ili.FIriEt: :jti:jc!,: F-r,1cl-r,rnqe based
on wna t
Villar saicl ! iJj b;r?
CHAIRI'IAN l..Ai.]F;E!_, I /r::n n;ni;ri
:r:;t itL.r=.tn niya r another
l icense. 1i trBn5inq,
n
FIIIAI'1EFAL f,OI.JFERT:NrE uH Tt-iE EEr.lEF:*r_ [1At'..il,:.ING Af,T
TTEr rltJ rrAtJt:.5 AJ'J[ F ] N/tt{|j] Ai- I t.,i I*.i;tf,lr:n IARi ES ]
( [t-]t-'1H L
11 AF.RIL :i_rr:rL] .' EF l- 1Al"i7 .ti .i H I V - :
tiHA I ftf'lAt.l Rr:-rf-:rl " I ii"ri' E r.rii'..'' int Lr: not cal I it
F hi 1 i p:pine -l f.*cL E rl cf"!;rGijE, Ii r.l'r.:.i.i rJLlLli icly list r+ith e
r Eq r s tei reil =Lni] l:t cl t.i r: i l;:r r, F . i::r
REF , fiflf:{[t.lt_! . !::'r I !: .i .r ::: I ....

i r.:: l:ri;rj,. 1r: rr.:1-dls 6;1 ,
rH# I Rf{Af.l i;lii:ti:r . i,ir.: . i:!.i!iiF:cii:.-, i,,,ii':,:i. jf 'i l- -t--r 1
pLLb I j. c I i. 1 ti.E lElj .
llHll I F:!'lf;|'J !i:ril!;rLi :ji:r,, r...rij! i.,r|tij l:i.iir:i. l. anq F,rtrFcEAl ninyo!
l"lr. Ih*i.rni;n,,, f {..1i- ;!fr1 r]:.ri-f,i!+r,- rjt Liii ji,.rrii:q.,
t-Hil I F:l'lAlii iti,lr,;Li. ii;rEl,,r .,.1'' r,;: l::.::., i:;.,:i . Llp ta T5 percent.
.LtcJ ang F,Lti,Ji,dnq .i,jct/*;i-, rr'Lin. 'l-j-i
i r- i:lr i:i.!,e. may}-Ecrn ng vE'tC]
pcti.ter ane f C!r ;lit!.-AC_ir'cJi.rrar1,,:
REF . HOtlE,V0. f:i,elrc, :i;t F, r' r: Jj --, *q F-r d i:ij;r-].teF flg SeqLlri ties
Act iyanq !;t]mE FLlbli{:1i. lti.*ten i:ititi:,*r"::i.i:.., F,Lliîede ng mejorily
sa mga certarn ittF i.rh!i:h i.tr-i*d t:{r rf,i,ii.t j-i-+ l:..i1-t_hirds vnte.
f HA I R|',1AN Rnf,il. !i fr,v i!ln, .t i++:. I,lr. {::irslrman
r tilrng pa7-aq
# ka.' lre sirnplif y. ',A pr-rblicly ] i.sted lrnivarsal bank ar
commercial bank fiay. olan Ltp to j.ljo Fprcen{: of the voting etocf
.o of on 17 one r or cclrl)rnerci.al bdnli. r' Th6 regt lrg

limit to t rid, lrje] 1" *n'/r+ay. pr-rblicly listed
shelrld be a se t t,,i.ied cancept, Hindi i,i a narran malie_register
diyan ng katiting lang. In an7, e,,.eri L. mcst 6+ them are
a l ready pr-rblicly listed an),/wa/.
CHAIRttAN LAllFiEL. [h;y sa i,/rj i ]/r,n,:
CHAIRI'IAN ROCO_ Then ure s!.mplif i." ,,A
"A i-rn
Ltnj-versal
i-versa I bank can
6Hn lfJfJ percent in thrift hank. iLiral k GF
c,ank
C,an oF financial
fin5F_i-r
FI r:Ai1EF:Ai- nilf..li- t;i;;f;:l..lill:-: ili',, Ti-i[. i:irriliir.Fii:1i.,. riii\ii,; i iiF Af, T
{ [i:]l'1f'l l'f'TEr ilu Eititi: i,i Ai,!il fr i ll*liit. : iit l lil'ii, fii'4[n I AF. I Es )
i L Af fi I L :{l{")r-r i i:fl-Ii\f'1;i{-rt'j .' li ir,! * f,
allied, " Ot;;:/" H j r-rL{:L n;.iuian !.ii;,J elri i:t ct.1ffmErcLal bank
Fi-: can
alsfi dE thiF. l"hat'Fi the d.1 f fh-rFnct3 #r.!{_, "
ftEP, l'l0l1ENtr. Ltcrat.r itrr. l'1|", i:iiai!-rr*ri, ?4?

CHAIftI'1AN Fi0ll[. Sa :4 " ti.Ip_,;:iii;.rnq, I wonld EaI r ,,A
ltnivers*l cr cnmmerciel ban!:, " nr;)r r-c,nn hang resrstance?

REP, l"lOREN0, fba ang ano. eh, j;,sng ea L(nrbanks ;rnd
cororleFci a I ban k s.
CHA I t it says here. this r,ril I alss appty

in the al banh5. Fa1e, it refers t0 the
cdEF
Flrblicly liEted. 0. di second Faraqraf;h na lang, ,,A

pt-tblicly tiEted univere*l nr cc:nrrrEri:i;1 banI mey 6Hn Lttr to
1i{) percent or the vating
=tcri:I r-,f i::ir 1.1.. r-,ri e, Lrnder nniversal
or commercial bafit: - ,, Fr..tlil icly i::l:ecj -r,_; ,_.t=ed in the. . . in .i.
itF gnprally Ltnderstoc]d ,nednj.ng. O. ctiay tra tayo diyan?

REF- MORENO_ SB. L{}{:r percent.
CHA I
" sne rrcre ,
RiIAN FUCLT . Oo Ffi=ta FLtblicly li5ted lie.
yEllt can own onF rnoreo Lrni.yer*al nr .-rjflimFi-cia l. . Due notice ne
.o lanQ. r-qr-ral:f ,i na1:itr p;ir.a !.:a:":tna

sL{Epend af ter dlr= n*t-irs.,,
ir ;1 t:j. rr Ltn. Sigltro. ,,ma1r
IHA I Rl'lAt'l L-ALtiiF.i ] i L. i.= ..r ,:{::,n,nar".lal

_i. banh n yolt can
disallL-rH if the,..
I-'HA i Rf'lAtJ fi:ni-:n. li:: t l-r,:: b.rnt.ir -i.;nr;i
Lytrn. You have a dlte
natire to the h;i,r L: .-i: l-l-:s L tl-rF h.;it 1... i::.ii: ;:t rtecallse Jnay
be
t he' ban l.: i t If . Iii:; r,f d:.r'::n
=e L: l,!!-: r LJ l,:i,::r. k{i. 1 I slrsperld so that
ann di ha'i
g'17
FICAf'1ERAL ON THE EENERAL FANId;INE ACT
{ COI,IHITTEE AND FINANCIAL I NTEftI.IED I AR I ES )
1l AFRIL 2OO(l EFTIAI-IZON/XIV-4
REP. NORENO. Ang reservaticn iE an For{er to remove
sholrld re5t primarily r,lith the bank.
CHAIR|.IAN ROCO. So. if we qive dLrF notice ta the board
of director, when ule cannot act, then they e{ill suspencr.
Fara, at. lrest" ikaw ang ,ray firFt
eption do6n se bill ,no.
CHAIRHAN LAUREL. Fnt supposins. - . Ina|-rdible) Iess than
I
5(r percent r can He .invest in Central Fanli?
( r NF.ORHAL Dr sf,u_q5I oN !
tDs LEUNISA Et, LI.JfiHINS T[n]: nVEH. ]
lli'Pr' :
a7&
BICAITIERAL CONFERENCE ON THE
GENERAT BANKING ACT
April 11, 2000/teony/XV_1
i
(Continrq4nd/ . , . (fnformal- Di sr:us s i. ori
tl )
CHAIRMAN ROCO. Mr. Chairman. o ano natapos tayo

doon ?
CHAIRMAN LAUREL. Ayrrl, meronrr s i nasabi si Oca,

CHAfRI'IAN 'ROCO. Nilsaan rra []a lrayo
doon? fyong sa
publicly listed, okay na tayo.
CHAfRMAN LAUREL- Secti on 25-
CIIAfRMAN ROCO- Ah, tapos na tayo sa $ection 24.
Can
f revisit something? l/hile yotr l.'ere chatting
there, I uas
chatting with-. . iyongr sa ,,may suspend,..
CIIAIRTIAN I"AUREL. Section l-5-
CHAfRI{AN ,'ROCOjr,rj",.
Signro after due notice to the Board
of directors of the bank, ha, in other r./ords r{e calibrate
f,r,l these are Marcos,.,lterns. Sa inyo
may due hearing pero ang
due hearing nanan napakahirap,
.o di ba? But, ,,A bank
director or offd0er,.,r." O. disqualified,
reuoved or
suspended after due notice
to the Board of Director of the
bank", di ba, "by the Monetary
Board for acts or onissions
hrhich render hin unf it.,,
fn other words, ve qive the Board
first option, ,.o, h,e are notifyinll
you na iyong isang
rnenber ninyo diyan bakit
naman kung anongr pinaggagava,
di
ba?" ff you do not aet, then
the Monetary Board can renove
hin. But we give to the Board and then
a
the Board can
0?{l
:1
BICA-IIERAL CONFERENCE
ON THE GENERAL RANKING ACT
(comnittee on Banks and Financiuf
April 11, 20o0/Ieony/Xy_Z iniei*oOiaries)
replace hirn because renember

if they decides it,s aLl we
can do. So the Board now
can efect with the vacancy
so we
can have a renedy'
l"*-y is neither our open ended into
the Senate or hearing because kunq iyong
due
hearing naman may notice, may
confrontation of witnesses.
MR. FLORES. will the paragraph be
So how
open?
CHAIRMAN ROCO. After
due notice, oo.
MR. FLORES. Basta Halang
ipo_profiote.
Clnfru{AN ROCO. No, doon
sa second paragraph, .A bank
director or officer nay be
disqualified, renoved or
suspended after dtre notice
to the respective Board of
Directors of the bank by the
Monetary noard for acts
or
oltissions which render him
unfit for the position.,, Or you
want to beqin, ,,After dtre
not ice to l_he respective
board of
directors of the bank, (conrna)
a board djrector or officer
nay be disqualif ied- . .
". removed, et.eelr.rra,, di
ba? So
parang you tell the
Hon(,tar:y Board. ,,Anylray,
mga bata nanin
ito. eh, nahuli n.inyo, r,
d,i sabihin ninyo lanq
sa amin baka
nanan hindi nanin
ipagta tanqgo l . ,, T.hel
it_ is better. you
can suppress di ba?
Because l_her:e are reputations,
eh.
Pero kung hinali nanan
kayo gumalaw, ur
<lj yayariin
Monetary Board, ,no. kayo ng
o, pur.rede na iyon, section 25.

Egui ty.
080
BTCAUERAL CONFERENCE ON THE GNNERAL BANKING
ACT
(Conmittee on Banks and Finaneial Internediaries)
April 11, 2000/teony,/XV-3
REP . II|ORENO . Mr . Cha irnan .
CHAIRMAN ROCO, yes,
REP. MORENO. For the record dahil nay question

kangina si Congressnan Laurel.
CHAIRMAN ROCO. Sige.
REp. MORENO. pag rrni_bank publicty is ted it

-l can own
up to 100 pereent of arrother uni_banl( or a
conmercial bank.
CHATR]VIAN RO(:O. YE,J .
REp- MORENO. Nclr.r in addi t_i.on to <.rwning up to 100

pereent of a conmerria.l bank or rrni_hank,
can that uni_bank
also own, let" s say. njnorjty ol i.lnottrer. conrnercial
bank.
CHAfRMAN ROCO. trre are quiet, ue are quiet on that.
REp- MORENO - And the reason vhy iyon ang question
kangina and there are provisions naman kasi
that ensure na
wala iyonq undue concentration.
CHAfRMAN ROCO- O. bahala
na. Unless ee want to...
hindi neron tayong anti_trust provision?
Ueron tayongr
anti-trust doninantr.,.pos ition. Hanapin
no iyong antl_truEt
provision na s?,. there is an idea to put
restriction -..
REP. MORENO. r think- -.

CHATRUAN ROCO. No, but if you are not sugtgesting
that, then we,re just quiet
and -let the Monetary Board,
081
BTCAHERAL CONFERENCE ON THE GENERAI,
RANKING ACT
(Conrnittee on Iianks antl Financial
Tntermediaries)
April 11, 2000/le0ny/XV-4
f'm open to one anli-trust concerlt -
CHATRMAN LAUREL. ry0ngr oomnerci al bank iba nanan.

Conplete ang...
CHAIRMAN ROCO. yeah. minority.
REP. - Iba anq lirnit sa comrnercial bank- Ang

MORENO
rrtorry ko lanq kasi tlahil sa existitrg faw

merong specific
anti-trust provisions like for instance the 21 (b).
Meron
sa fourth paragraph, .,Ir order to avoid undue concentration
I of econonic poweFii,re.:l,sewhere'
t
, nandoon itong provi5 ion na
ito, eh.
cHAfRiuAN ,
ROoO1I[,,. ,enyway, watch out for the anti_trust
provision vhether in the ofd law or under
our provision.
So we will revisit that. Okay. fn the meantine, can we
proceed?
Section 25.
.o existing lal./ iyan, di
Non-Financi.al A]f ied Enterprise.
ba?
O,
Section 26.Sinqle non-afliance shall not exceed

thirty five (35) percent of the totaf.
O, ito pala, it
is covered pero non_allied ito-
REp. MoRENo- Non_atlied ito.
CHAIRMAN ROCO- Non_financiaf rrfi to 100. t{on-altled
up to 35. euasi_banks, may
1init 40. ano ba ang anti_
trust provision natin sa present
law?
BICAHERAT CONFERENCE ON
THE GENERAL BANKING ACT
(Conmittee on Banks and
April 1l-, ZOOOlleony/Xr_5Financial tntermeniaries)
o, do we have,*innoliLems with
.i
, 26 , 27 , Itlr . chairnan
.
25
or we can proceed?#HfXll&y.i;61" existing
law. Okay na iyan?
REp- HORENO. I,m sorry, llr.
Chairman. Sa Section 2?,
12 (e). Dahil sa ngayon Lra.Iang limitatior.
CIIAIR,II{AN ROCO, "Itlay" lang naman j.yon, eh, di ba?
REP, MoRENo. Oo,
o ROCO- So Lre leave that ancl let

CHAfRDIAN
then give
their judgrnrent, povers of the comnercial
bank. Basta alL
these we are lookinq at this Section,
okay. Connerc ial
bank. o. this is an ofd law. Section 28, Mr. chairman.
Old faw 1to fahat rrnless f am rlrissinq somethinq. $o ve are
on paqe 10.
CHAfRMAN LAUREL;,Need,/on
House vers ion sa last
CHAf RMAN
'entence,
ROCO. Saan? Or what r:hapter,?
CHAIRMAN LAUREL. On porrers of Cornmercial

.o .rnserted the word ,,neeri,, .
Bank. fle
These rrrl es nay include
but need
not be fisted. ,,.
MR. FLORES. Section
28 sa r.u,e Section 23 na
fang and
naY isang' word na 'need,,
.
CHAfRMAN Roco- Sige, kung. -. oo. ,,These rul.e6

incfude. . - ", tangqral na
.lahat. ,,These rules inc.lude
the
deternination of bond
and other debt se<_,urities.
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BICAI"IEftAL CNNFEREFJf,E BN THE GENIRAI- SAIII.;II.IG

( CI]IYI'II TTEE ON FAIVI;S
ACT
ANT} FINANCJAL I I.JTE.RI1EO I AR I ES )
I I Atr'tr Tt itarir.r EF,TIAI'1ZflN i XII] - 1
CHA I ftI"IAN RNCtr . ( f,tr'n ti nLr inE j i.-infcrm ryBng

anoq Harei.
REF - l,lORENtr. Saan ns ba talralj
CHAIRI"IAI| R[Cn. Faqp 1f. we frave nc] trrotrtems in trage
1l anaJ fta na i:/trng UllEiF;I rrrles nat-in" hr.ndrL tla?
REF" MOEEN{]_ t.Lc lane _i1;onq an.. flr-, Ehairrnano
J4.7.
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ijr-E:!_i(:r-i. Is may be
.o iftclLrded amonq tfic.r=e ,*Lif_.j c...t .ln

inay be detE,rnrined trl. tF,{. l_4finFtai,l/ 8i,",;1;g.
.i_
I.i,13s;. pre,rcrrbed limits as
f,5:. prr:viderl ih;.1 sl-ici-i i,ir:i.ttsrr ;i-if-,rrrvt I Eh;l l not bF

reqnired for joang,..
ta sigLrr* sng sd ;!5. |,le Ehlri I n r*aeat the
I
prior. The
cfficr cf any banh. srrector ar af f
icer c,f ,,
SUSFENS I ON : i:1::; F'"iY,
FESUI,'PTION t 3:2i p ,l"l .
FTCAMHFAL L:/JtiFEFrrui_:E LtH I,t,tE
$E].Ji;Frii!_ .,:Ar,$i: I NG AfT
( [n*niTTEE
Ui'J FrAi.]l: ;t rititi ir: I ftiifitlur' in, riro.,,,,rorARrEs
II APFIIL. ::{r1jr} .. L:F:. 1 I Ar,j.t ni.j _ ,..
)
.4i.,II :
LlflA l:F;tl'lAl'l l-ilji-rtr= *n, ijj;i:rei :il, +.:.r,; i,,,,,....lrr-, i..a t ito.
-1
hindi
ba? [4s wel-e {-j!t i]:.1r:jF -!..:i" l.1r-" L_: l..l.i:i t-r,l_:r1,.
tHAlFrl'lAf'l i--,-rr l$iL:L i,-i:;,: .{..: _
f-:HA I t"tflAi.I l-ii.Ji,rit. j.;:i, ii+r i ji:r .l:i.i . j. Li: sa Section

r:.!
f,F
1;-inq, itr,: {lf r. ii:i;t i,I ,r!-t),. i-,".-.t|i.;. i...-r=i;ig1|-" nfficer
i::i
Hho
vinlate= tlre i--,i'1.,. j.=i.l,rl.; ,i i i:i:::: sgct:cn shal t
l-iltm*diatE,l.L... - *e *.lrcr-t lrJ /iiarEi Li-a:i ri:i ,,iii+,..,, :iitng" ,,rnay Lre,,"
gLtstA t:c l.rgiz;q; d-rft r-tst]iii _g ,,dLri: ,,notiCe
nilti_:., eh afte}-
wrth the trcrarcl . ,, di tl.r, Let..= []dl:i
.r t ctrnsistent, We
calibrster di ba! l-hF {l.f irce l:f ;;,;... hank directof
o|.
Efficer Hhc viat.ate the.,. !Tt"i,,,. he terlared
af tEr vatrant
notice to the board sf dirFctor *ind
shaSI be gLrbject...
REF. HnRENn. And sr.ibjEct tc: the penal provigions,
CHAIRI'1AN shall be s|.ibjFct to the... Wala
na taytrng sect be sltbjct tc! the pensl provrsions
of the new f"rrL p*r" He mahe i t trrfiad,
Cen tFa.l..i
H|.lwag nem6n
autofiatic ito parang death by hanginq.
.o 50, h'e invent ngaytrn a nell

Frlldentra] feature.
nntif 7, the bsard. l.;r-rng masi_seif ,ij_i_sr:-j.F.iine
He
nila. di t:kay
nar hindi ba, !:.rrng hineli
ni,nran r art:rr;1n tiayo. l,lonetary
Fqard? Di filagtsndanq tingnan.
Flrwede i)/afi ano? Ahay ne
"
ryan ha, Hindi na tayc rnasLr_show ni.lEel
f " there are two
bi l1s to stronscr. eh.
CHAIF:HAN LAUREL, Ah" ci.;ay.
CHAIFI,.lAN ftfi{]i]
" t.i. hcf
08$
FI t:Af'tEFAt- cfihiFHR[ti.]r:F- flf',i Tl"ll::. {,iEl'jl:ii.-ti:rl i-iiii,j it I
Nt! AUT
fLrftlt'tITTEE UN FAf..tiiti Af'lD i: l..1Al..lc I i:]i l tri t-t.il:itl"1!;.o I AR
.i.
I E5
1-L AFRIL :.:l:){jL} EF,1'I*f'l1tt.r .r :,i,t I I _ :]
CHA I RI,IAN LAUREL , l"lr" Ihair. irr;].e=.s favorable to the

ban ti . . .
CHAIRI'IAN RUEUi,, bth*t page i.7-an.,r

CHA I RHAN i f,f,.
,:::..i.:. '. l
Rtldn,"',9i. "UnleEs f avllralf,tF tfr the bank . "

CHAIRI"IAN
REF " l'l REf,l0. Ito actlral l). an,_;

r,,ir-r.ir,:aanc, na ito sa
rnannFl= af greparaticns F,aranq iJFn"riil $.tatFfient,
IHAIFI'lAhl Rnf,n, ,,Nat ]i?F- f avrr-atr.t-F.,, FLrt it Hill
all.Ja)/= he leEs favnrable, ?i:L.i r** *.1r":*i,,=, FecaL{se even
o if 7or-r g.ive it. supposing it hae e,..rartii., the same termsn

tc whclrn wilJ. 12611 qivE it? Vjsi.taliiE. E:jartly the same
t*rmst to r*hom will irs11 give itT y*li nnl)z have so mlrch
tnone:/,
f,HA I Rl'lAl.J LALiHHL. 1..:.=_i. r,r n 1.r r-i:i.,jn L'r i::li;rJ-i t-ic,nE nafnan . Fc,r
l"r)stance. j.f j,,i-ri-l t.ri l! i i+flr::l i-o .,,.i:r-ii- {:. r'i:: c t-c, r " tt rnttgt be
cnllaterali:ed"
CFIA I F.:l'1Al.'l lif,]i-:t"t . I i irirt*ir-.,... 1_",i,i:j, i..;ir;t I anr sayinq. this
.(D FhrasE -i= vFri, d.iif i.r;:i.i i.t_ ti: ;,:iiri:r 1.... r,,r i i-.h,hEcaLlse it will
ali^ta;rE t,e lEl*:: f i..,:::r,ihj* i:: i-i;p it,:ri.li. r,tt-iHn l.:
the7 gjVp it to
)/nt.l . In a ci:r:t,=:sf i1,,r]1p;p6r, |r...,ri,, ,ii.t i t-,;1q; heing
eqltal di
hai It is alu.:.:;:-: !=_.l.,,. -i;.;r:r;l: j. r., t::::
ti:f: $;i,-r l,i theoretically
tn give it ta ;n -i.i:-:i:.{*r-- i,ri_i ,.:J-i
;:.j",,:i}.,.: + L,Ftt{gr of f giving
it to ther c.tLrt= j.dr:r- i::ai_t s e ,,/ili.r ila.ir

L::s-.:
,i,=..i..= l.nternal rigri.
hJh&t I a''] Ea,,.inE is thr= Fliind*ri!
i =.-. ,/err/ diffic..tlt to
cc'ntrl/ with, It j-s nr_rt I.r...i.
FrLirq th=_ t-_]Ljt;Ft J. trrnhibition. It
BICAMERAL CONFERENCE ON THE
EET{ERAL EANI.IING ACT
(copr,rrrrEE oN FANrr-s AND FrNANcrnf
11 AFRIL ZOO(' I EFTIAT4ZON ,/iruilnsEnrARrcs)
'*Xvr
I _ 4
Ls not rela:ling althor_rgh I dan,t i,inowi fteybe
the benh
5Lrp*rvisi'n. y or-r kncw, yo.-r can tel r r-rq how that is
done.
CHAIRMAN LAUEEL, t{*lI. in ,f act"
it rs restrlcting the
DOSRI. In other w*rds" if y nr-r are a directorr
yolt are not
f avored
cHAIRt'tAN Rilf,n. tr), this.

f,HAIRI'IAN
LAUftHL" On. ljn the ctht_.r hand. f clr the bank
o
if )/at.t are Ei.f.t,i-n! irr !:her L,nariJ, .,;a;i.1 ar-e

most probabl y
gorng to be .nore .f *vnr l:i: the h_-rrr k i. f
" I lend yolr the fioney
bEcallge I l;nnw :/ {--1t.t [jr:::rfi{:1ria.i l i. , . .
( DS LE0N I 5A it " t_utrH I r,tG I'Llc!: t_:tvF,F , )
w4
.o
0.9-1
BICAMERAL CONFERENCN OON TI{E GIINNRAI,
BANKING ACT
(Committee on Banks arr(l Irin-n(, 'a | | nt'.,r.mediaries)
April L1, 2OOO / j eDny / XVrIt _1
CItAfRt\rAN l,l\rrRFtl . (Conl,inlrin(r) personally and.

you're comnitt;d to the bank. Iyon anq natural
defects.
CIIAIRMAN ROCO. Anyway, He can leave with this- okay-
So that, idaqdag natin itongr sentence na ito.
Walang nano_
modify dito sa 35.
CHAfRI{AN LAURgt. Except iyong notIce na g.nsto ninyo-

CTTAIRMAN ROCO. Oo, ito sandafi. cawin natin itong
second' paragraph. After the first sentence, L,e nake the
o second paragraph,. okay. After hre end ,,with the supervising
and exanining "depa60[ent..

of the Bangko sentral,,, Ire put
here "dearings of the banks with any of its directors,,,
etcetera, as is. Okay- Then the ttrird paragraph, .,The
office of any bank director or any private, the provision

(-' of thj s Section declared vacant and after due notice
maybe
to the Board of Directors by the MB,,, Iyong for[ula
natin
.o shoul,d be consistent. Iyong ,,prior due
notice., natin or
"after due notice the officer incharge maytre dec.lared,
but
may.-.". In other words, the Monetary tsoard vill
always
notify the bank. Disr:ipline your guys,
kung hindi we will"
do it for you, di ba, without any problens,
Okay.
CIIAIRMAN LAUREL. oca. iyonq Exr:lusr.on of
Loans and
Credit Accomrnodations, non_ri sk.
REP. MORENO. Ort, tana i t(), t_an;r i to. These are
BTCAHERAL CONFERENCE OON THE
GENERAL BANKTNG ACT
(Connittee on Banks and Financial Intermediaries)
April 11, ZO00 lLeony/Xvrrf_z
deposits. . . on-,*ipagsiri5.i dito sa page 35 ,
CHAfRMAN ROCO. Anong section?
CHAIRI'IAN LAUREL, Sane, page 35.

REP, MORENO. page 35, House Version. Section ?4.
CHATRMAN ROCO, Monet ary Board, itong second
paragraph, di ba? This is now fourth paragraph,
n
tl
r'--,' because we broke this up.
ha,
CHAfRI'AN LAUREL - So iyon, just fike the fringre

benefits are being excluded. we have the
non_risk.
REp. MORENO- f1.o iyonq exclurlecl from
PSBL. 34.5, sa
Senate .yersion we have also exc.luded
them the gross rate.
ROCO. Ts there any modification to
CHAIRMAN
the
second paraqraph of I 9 to Ztt of paqe
:'0./ Wa]a naman yata.
CHAfRMAN LAUREL. Saan natin jsisingit ito?
CHAfRMAN ROCO. No it becones second paragraph.
.o first paragraph ito, It en(ls t_here
Ang
then singit iyong House

versron as a separate paraElraph.
REp, MORENO. Sinqit iyotrg
Horrse version.
CHAfRMAN ROCO- No. no after this, . the
required' -." at dito singit u-ri jyono House
version, iyong
dealings. Third paragrraph noong ,,after
due notice to the
board of directors,,,
CHAfR}'AN LAUREL. Okay, sige.
0*g3t'
I
BTCAHERAL CONFERENCE OON THE GENERAL BANKING ACT
(Connrittee on Banks and Financial fnternediaries)
April 11. 2OIOlLeony/XVIII-3
REP. MORENO. Iyongr fourth paragraph, Mr . Chairrnan.

C}IAIR"[.{AN ROCo. f tonq Mone Lary Roar:d.
REP. MORENO. Sa proviso sa Senate version, before
this proviso rneron iyong proposal ng l{ouse, i-include iyongi
non-risk assets
CHAIRMAN ROCO, What's the proD()sal?
CIIAfRMAN I,AUREl,. Ito ng.r. ',That- loans, credit
acconmodation and gu.lrantees secured by assets considered
as non-risk by the Monetary Bo.rrr sharl be excruded fron

such levy- " Kung baga hoJ_rl-out fr.om deposits against your
own deposits or you have government secrrrities as your
coffateraf.
REP. MORENO. Mahigpit itong natitira ng House
vers i on .
CIIAIRMAN LAUREL, Eh, paano anq dami nanang saklt ng

ulo natin diyan*sa,'imgar,,nagsasaranq bangko.
CIIAfRMAN Roco!'+rr*f.Brovided by.,.,,. so it beconee line

-:
26 becomes .,providedby..." na, oh, okay na iyan. Sa akin
related interest even to the Board.
REP. MORENO - Meron pang isa iyong stockholder sa
atin, Mr. Chairnan. Doon sa page 35 we,re saying ,,sugtr
na
nunbers shalt be sufficient to e.lect
the nenber of the
Board", sa ngayon kasi two percent lang
considered na as a
a
BTCAITIERAL CONFERENCE OON
TIIE GENERAI,
BANKING ACT
(Connittee on Banks and Financial
Intermediaries)
April 11, 2000/Ieonv lxvrrI_4
stockholder and to elect directors. So we,re expanding it.

CIIAfRMAN LAURETT.
Okay. Controlling Stock. parang
unfair naman iyon sa present law.
REP. HORENO. But we are able to live with that.
CIIAfRHAN ROCO. pero sandafi. Dito sa page 14,
nayroon ba sa page L4?
REP. MoRfiNo,,liid$@erMsr.en, Mr . Chairnan , dito sa House

version. f donr*tilgknbwl, where it is.
CHATRMAN LAUREL. Ah, itong Sect ion 36 , l'tr . Chairnan.
CHAIRUAN ROCO. Oo, iyon nqa iyongr pinagkasunduan
natin,
REp- MORENO. Under the current system
tr./o percent 1S
already considered as a stockho.Ider
ka na kahit na
fr insufficient elected director, but we.re
retaxj.ng it.
CHAfRITIAN ROCO- Baka masyadong mataas ito.
.o REP. M0RENO. So kung seven
lang ang directors no
ilang percent iyan? one seven. That,s a... percent.
Malaki iyon. I don't know. fyon tang ang signal
ko sa
problema ko. Hinihiqpitan
natin pel.o ito, 16116p stockholder
nere-refax natin.
CHAIRMAN ROCO. Mahirap itonq pagkasunduan.
Can you
live vith two percent of the listerl
company?
CHATRMAN .LAUREI,.
okay sa inyo iyru, Mr. Chairnan,
or/
0dd
BTCAMERAL CONFERENCE OON TTIE GENERAL
BANKTNG ACT
(Corurittee on Banks and Financial fntermediaries)
April 11, 20OO/Ieony/Xvlrr-5
! we just renain sifent,

CHATR},IAN ROCO. If we defete this, but I'n trying to
live with it because sa GS may hinihinqri ring two percent
ang sister conpany, ff you put here trro percent
of the
fisted conpany, rnay pagbibigyan ka rin. you use the
same
standard for that mat.t_er. Ti.nqnan mo. Iyong isa you
muse
report this. you must have tr.ansparency provision.
The
nonent you own nor.e t_han trro percent. of the listed
conpany,
you nust be transparent. in your stocktrolder,
of all of this -
Hind-i narnan puwedeng "anri to erer:r-'., l don,t know about

of
Metro Bank.
REP. I,IORENO. So kirhi t 1..r pereen t. l<ung maka_receive ka

you are not to sul)jecl_ to the debi Ls,
CHAfRMAN ROCO_ Tf you use tuo per.cent stockholders in

this section, it shalf refer to those owning and
.o the shares of stocks- Iyong control...
controf of
{DS ROWENA I. PENEYRA TOOK OVER)

i.ir ll {tr:rFll:.fl ri 1... {j{.'r!!!!:: l::.t;it:!!!tt[]. i:ilJ"ti't.t: f )[].!i:.
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l.is{:erj {:fifiFr;lt1y r hindj. bi:'i' Flai- j.hi.rr:i.rL;r/ din .tayang ben6fi{:

d$$n ti! iiir liti hincji ba'l r'}n c:r l.ra crnq j.hinigay n,Rtin?
@ Ityan " l{ isted l.;a,, y{:l.r {:*n *t,rn ;[OOl{. $o y(:r.r
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r't:lally nl} ,:]trint i|1 ra.;-i.ri11 ,,{J;-,, i:,,inl:. i]jVe thi vaJ.Lle t{:)
yn{.r r t}{}r'r'(:,kr(nr{!' co l. _L,x tq,, r.a l_,,,,
" A/*r+ rr j.nyn nc; ${J.!1

(.:l"fA;tftFlAl{ h'n{:fi
CHAI Kal;.:i deternrJe nria sa situation, ilw

ic*ln0ttli c the vcl lrieg el' real e5jtate .
T.:FIA I eeh " Krrnq 7t} " ;rJ.;;y ha sa iya iyurft
ft.1.t::r:tl"l[jf.j]riltl,. {-:{.L.|f: [j l;;jl;:. f.|l :ljj. {.:{]jl'll.'r- l i lil.t:.
{.:*itrr:i. {: lsp: litLli i;rir ,!i l: :i. it ;.., it
r:n r:: :i. ,r .1. .i. t-i i:t- t"itiq,-d:i. n r:i ea'
flf)f' :i I .L:L \ i:tj/.)',.!.r f-tet\ e..' l''r ./.r. .[:1. -'.:i
{::}.lA l. Ftl"!l-ii.l l. iiJl.!f::li:.!..... I'i.ir*i:iir'- i':i.t: t:u rit,, F{.lFde rin nq li0"
fir: :i.t c!'t*nclr*i;i., :i.r-' i::tl:[,-i t,.r*r'dr,.., :.i ii., !:] +..rr',r {:i :i E q nn 'lhe ittlat:ic}fl
tlrf' {trt; {.n!::l:r'){:rrn),'., til t+ir! r.ir::, st+ li':'..r.: i.i::, l!.i=..r!isi}a{:el and *.ry dr01*
*r' :!f.ri: r:r' lllii:i'i'
ill'tfr:l:fil"lF l.l Fr{liltl., i'i+,', 1:r:1i.'l!.r::*r.i. rrr:b.lenr R l.i$ rJitc. Thi::i

j.::i F;ay 'f:i Lr $ltitttlt:ri,-,r :i.'li:,, ll,,!lia!']'lFirl j.to b*cartse an$
;:r'r:rhlellr ht: tJ:ii-n i,.r+s. h:irriJi. !t :i. ii :i. l:i :i. i:l:'-,rn " First, rgra.l
irB,, "
aitrii.La {:,' h,,rl:; lir.rr::h J.r:r* i:(--..[.1.*i.:er,l]. r..,r+ ll rrr.:, rl.r-t+ad;v -.. Aql.Ariitft
r-cn f'{Jr'ff rrr.r il. a na- And Lh{.i!-' lin.,,.,. i ,,, i :i. l. .: t} 1 a.' crJlllate,r"rl fiq
rcl.ir J. ensr-tln t.?., &<)'): n&i.\" l.lj.ficli /rli;' trd--., " .6{):* nga. l'l.rb ti pir
ta.rsfin nlc] n.R lang hung g{.r1;tc] fir}. .:rny!,Jdy r rihal l nc}t exceed "
$<r it i$ tr':rtr 't F.R rinr di biir " ff y(f,lt |4antn taari.:rn
na'Lin. iri,, riti 1] cl$terminrc, by the fjdrrl,i.
Flfifian apin n ang 6fl:d hFfi,",lq.rsF ini rerehlamo ng
r[g a mfly natr!frt'l rrir l,:.a t;ifi cl i hindi mo nafian

r*a :i b sn {:;r ,, $a i tc n i. an*,.
CHAI "l.hcr .,secand i*is*lre in the reel esta ter

s;hnltl d he :i.n the namr* {.'f t he m{:r r 1--c.:-g {:r }- . That means that a
l3er'*:$ll ' t:i 1!.:.{:ln Crlnnnt h !-r{f!,r r.rli:i.n|] t !-r"_: f*ther's pr$perty "
'l'h* t is; 1: l're r+ffect of {:hi!5,,
fil.t,q I ts FtAt'l f{ct{:f-t " S.rhihin na li.n na {-1t- assigning... or

*::i*i-qn i.nc1 4 cl*n{:rftn ,,
Cr'lAllll'l6l.l L..Atlfif1t..,, F, !,.{:.. ,, ..
.1.i:1.,:i
t.ll.ir*r.L t":f,hlthl l{{l{li.i,. l.lr:: - !-ri,::r.,, .[ i:an 'rppreciate that,,
l lt,r'l r.Llt::h :1.{:}tl j:i.h,.i.l .l nc,.L hq,- ,, ,, "
{:llAIttl'l6l'l A!.JFt[.t..., .[ canrrr:{ elvtrr, h.ii.-r.fikr. . -

1.,
V,V
fi:t f-:illl[:.1;:41... {.]Ul.lIrl::.,:i:,,:.l.i{:.l;:. f-l{ll'l!'1.1. I ili;.i::.
{.]t:rr'n:i {: {:c"-rr i::rr itlri l':.r. Ji F :i. ir ri c: :i. ,ir .!. .!.1!:,elirrr,:cl:i.,.tr':i.t+tl '.-,,
AFr':i:1. :1.:1.,, il{} # i}.; f en e:* r rr r'}i L ;.i - 4
().{AIEl"lAil r{${:tr,, .L t1 t'a r.; t ,,
{::t.'tA r ltFtAt l ynr,, c:i.li] hr:rrt:w i.t$ing 96ftF" " "
F rclF(ir ty ,
(:l{r,1I !a . ,'lry "" ,, ,'...:\ u hF cannot bcjrrc'w i
h6 iF* Il(i t ,,,

ban k " 0i. tra? Thn banl.;sr wiLl n(:r t
*?t:L:Lfiw i. t ,
[:l{A.l l;:l'1Al'l l-FrLlf;H|',,. iiii n;r i.ynn,, li..rfr:rt riyirn ang h,.nnel l.x]
.i:-{r'-: : -
,rlrrt nr..r{ -rJr,.rc:i cl s. hr" fllr*i.rrrran, h:incli i.ynrrcl h* t.as"
CllAiffil"lAl.l lr't]ll,'l]" l'lc- $r.r-t ih+i tln.ii c;,-./ il;slte is i.s :i t
tt"r.i Frir*r'rg the Fcl:li cy iFsr.rc' j.F tc] rel.ax lendingr
,:](ilt cJi b.:!r
h+il{::,tt.1tif.,. i, 1: :if .Len{Jing 't-h,r't qivfis J. (:v+:,r"19 e tc} thF p,c!tr}Lst -
1lit: t.tt: ;rvei ,isi!:L1r'i.nq th':r'l- l.r-:i-rcli. nc.1 i.r' :li.hFrall.i.te<l ,, tJe are nclt
lLih(rlr'*1:i.z;i.rir:i th* l-r+ri lif. ht.tt i*ii: ,.ii.i. rii:., r,ian t t* Bnfic]Ltreqe
ll:i. he.rr'*il:i.:rii+ii cr'q}r'f :i.l:., 5fi i,.rer l'r*,..,r, .-i Ir{!Fi.r,liGt jr.tsti.*ica'ti.on
'f'*r' l:tt:i.::i,, iJ:i ti.-,,.,, l,'I!i:i..!.r+ q'+ .1.;i. l::r,r:-.,-,r .i :!.
.:r
t' li:ir- {:he bi.g. we al[t;cr
.l:i,hnr',.,t1.i.:r+ fr:r' l ti+: ::rri,,'.!..l

.o
,,
l::|.{it I f;:flAFl 1.. /il.Jt;!::. !,.. - lir.r.i: +-'.r :i:t.r.l.d ;rJ rn have * nFgRtivi
q,-f {'r:r::1,, .i. ri r:l:h*1.' :...rr:rr-i:l:i:., !..lic: l:.:t,.,.r' 1.. r,:i..1..1. rn J.anqer, lend" T,
u,riJ..l. rinl .1. i.j,! r r:! i:.r i:i-''':i.= i:r.::" r-{:!!',., n ,,,',.,,,,,'i..j .;
J-.,i-*, hClfrOWer it
i. tfrii:i iii t-;iftcl I r'i1,:. ,.'.1.j ;.16: i:.:it +:. -!r,, , ,,
f.:Hfi 1.li:Flt-"tl'! fit.l1.,i.j,. !',!r-, i ;..,r ' 1:1y.;;l /,ri.i;rr,. l-:.infint Fxcped" $:i
ba? iii4i fi,rq:i.(:lj.n,J l-jii |i:1,: j!.r:i.n:.:t ,.,.., .ii :! l; ,-,r inaf .ter et rinht.
illttdr 1 ,. i...ttl t:.i.1+ ,1'tlii-r, !.i.i6rt. if t trr,, hc.rrowrr
[i'itlFrl.l ,..I.:'l.jl; t:1..
:t.1;i r-:i ctcl{}cl l;in r rr:,!rcj,-- *t.rrJ .lltr: i:r,:,, r t. r,t+rr.lr-- tr: {rrJ afttr th*l
horrfiu(':'r it sih{:rl.r;l rJ t,r., *hl.* +-n c.r i.r,,r... .t !t.:.i tst- freil. lyan *nq
l-l$:int, hin{Jj. };1r,ant .1..r{i r i rj l:.:i.ft{:i {..? ,.*.J t.!,-, o{: t.he refrl estate
j:
.ii
l.ri.: i ::'jl: i:i' :: i i.i! il:.ijj i:, ljr l.ii.ij: i.. i.rj,ij,i i I :-ir:!:
i..!...'.-:,:.':t i i.,,,it, t;l: li-'r'ti.:i:; .;j : . I i : : i. ,:', :
i
.
:t , ,1 i : :
,: ,;:-Ji,r:r,r.i l.,i:i r,,:::
t::tt:t|- i i. I .j , r:t,..r,:rJ:r -j::,i:...fr{i.j;..i-;r.. '::: l.:,i.- l:i
ri lit',,' l:i it'..,r i::,i i i:t;,, ,,rt:r:Ii.::.t. i:: i::i,,

ii, ::itj::lta]r,, :i 1r i;.. ::.,:.j,:,jij:::i: .i,:! .1.:r.i t.:i
i i;;:i,ttr;.: t;'i1.: :, ,.J:
t :r,ii: li:;: ii:r,r,i r :1j:r i:

: t j :j: il rJ itn:i l t ., ir.tir :..
t:
t rt l
HJ i.::Al"lrli*L i-r-lhjF: t]|::f l.lL'Irj iii.l I i-ilj: i-ll::irii.r"i:l:iti jill:.Ilvl_i AIT .i:.i.rl
i Ii,ll4l'-!.f T lfi#. t,lili i:ri.!i.lli:]:i i:il'.ii.r i:i l l"i,:rl'li I I i:li I i,l ! I i::'qtrfl AR J ES ) T
L tl[]F;: i.. ;l{.r1,rl r )

_1. .1. ti. i::,1' .l i'11..!;i i ti,l *{
fll-{A.f Fflf;hr i..i',1 itr':: - i i,lr::l II r: r i:r it i-t l " .. 1t:rz Hhy l imi t it
t-{:r .,i ii',r'
IHAI Fll'lAl.l i;lt,ut-l , F*.j;iii (lri. i"! ;i!it,, ':'..r:1 .
'i
f FlA l Fif.lAl'l l....Ai.JF?[i.-. , i-,ri::;hr: ij..,! i-]ir i::r ii ri i..r !,. c iyEn.
jifjr0. qr,i= i,r_, l'. i:: .i.;ir:q qabj.hin...
CHAIFr'1AN
" anq
t.JLr
fiEF. f,li--tE[f'l0 " t4l-ra i: tJ-rF Ei;nLri:i" ijt:r!.t:i-a1 lras gcne dahi 1
d[-1t]n Er Asi.an cr-i::i*." hJ.r]:Lit!:, j. t.rn :.i.,; r,n I r*a1 q:state 1oans.
CHAIRIIAN LfiUFFL, tl't sal:a a!-rq 1ia.l.L.r;rlian sa cld law is
7t-t,
o CHAIRI'4AN ROCI. I think. r+: EhELr]d g.r bacl.i to the o1d

law because we cannot lihsralire $wn|?rshitr and so many
thinqs snd we iheral i:ing ct-E:rlit, Nakahahiya! eh-

hle are favBri q bfiys r eh, l.*le ml.rst give sornething
f ar the smal1. This is the rea:c"'n f nrthisq eh.
In f act. I ] rE i,{rllr i.dFa, l..unr: ilii; tc mo ?0 percent,
Et-tt if 75 percent. an)/!,i#:/ shal I nat e)tceed', let
we mal.le it
the ban l.t decicle, Ernt we are nral.;rnq ;i jLrdqment al ready
becaLrse talegang anc eh di ba? Therr )/ (:rlr {"ril I releese

credit ta the.., Becaus* ang -redit r:aman for the biS
bcys. r"!eIang hr-rwenta Ft.r" s111 s*l-t a-tHs)/s hnrrow abrcled 1., j,
estrecial ly ngalc:n s* rrrrt I t i * I a tte r.4 i 5 . It.s easy ft:r the

big L,ai,'s, r:\nc i:r-rr!.r 1p_,in; n;1t:i.l *i:i: rrr;..,ri. i. liit, Ang hirap_
hir*p mahahirar'n, i-)i l* fi arln; jiri1 !.:ti.;.!rn f.: * na, hindi l.r. e pa
pinahi,hiram. l.:L.in-il ra iflg l"r-i. rir_t: i.r; i:::i.il":l.i'i.h-1rarn.
FFjF'" t1ljlit.l,1r_t . ,L-i,,r=*:,j {]l-} ,!: i_iiii #Ft:.r!-;r; ,;ie*ij vallre.
q,|'4
I02
B]IAI'IERAL f,ONFEI'IENCE OT.] TI.III 6EI']EIIAL NG ACT
RAI,.JI,:.I
(CII"II"IITTEE OI'] T{ANIiS AND FI}.IAN[IAL ]NTi-FiI"IEDIARlES}
It AFRIL 2OOr--r / IPTIAI'IZUN ,.' XX - ?
r yclr want tE chdnge aPPraise?

no. i/en na rirr. ;ptrraistd valLte gng
wording niyan,
CHAIftl"lAN Rnf,O, 0" agpraised '"d.l.t.iti" 1f yaut want to
mal.le. aha I 'rn. , . if yt:li can nral'le thiE iheral " Bliey sa
I
al.,: jn, After all. nr] herrl. wj. ll i'ea.l.i11 3;1.,.sf i" LiLl ?5 percent
rrn l esg Lrpli.eve lia bel teve =; .i.i r, -

# CHAIRI'IAN LAUREL. fher (rtd 1Br4 ir; l/t;r. di ba?
CHAIRf'tAtl XCtCtr. Seveniy. Fa;-a !=El. ;ll,iin " rnas maigi na
ang ceilinq ndtin. then r.iF FrnFrcint. l'1ai' garsn din kami dittr
sa anc. eh. Itrr. ch.:rttel arrLi intai:!l-i.hiF Frrt]perty i nllaqyan

drn namirr para :i.ili:;-r: ral L:rgr A ::.i::ii-.lr i:i; L, i lrnrraNlng.
FEF. l-1i:1!:i[ llll . T l:F,it-,i:, f'"jr-. i. i-:;]: -r, r'me!-r . therF frre
actrral l1: trrr flLl-ri:i r.as!-!ei!:i ir,r.i |; i::l i *,r i:a i::11. Dahil under
Serticl 78.. .:lr:-n 5a i''-rrjFrtiigtrt:ii!. i:afti'L na jLtdicial
f crec I Cfgitr-e i.,,'t:lJtrJ :'t!::li {:.i-:l;il.j!' L ':: firi i'l :. f .l .?{i t(] g BnF year
retlempfic,n p=r:.r:i,r . F:.' .L *l* j.:";i; '.:ii 1.iJ-,dPr the cLtr.

'-Fnt
EenFra -l Flanl; i.nu alii::t
Sr:rilrid i :. -t.","::rtrli ,..ii:i':liti l i:, f i i,r,. f i;:,:ji?mlitit:n . That' s

dictated nr- n,].rrJrrir:i! jl L.i:e Ljeri::r.:r.l i::ar:i..:ng Act. I don't
l,;ncw. si I e.:n L ta:.;n i:l-i. !'-a. *ji,
CHAIftI'lAN FUC{,] " ':;i;in ri. tr i::rri ? i...i:1.'; ;:rij,,i reEs on the issl.ra
rnlrna Fara l"rindi ia:/il ma!,i"iI:.. i'lr-,, l.h.i:i.rfiran. if you Hill
411or.," ar'yFrali. L:ei.linr1l lafici ri;tiiiar :.,,.r-irrq 75 perCent, Ttl
fiFr as we literal i::!:, f r:r .Lh{= b-t-!q i:hr:: ,r:arilE we liberal. j,ze
BI CAI'IEEAL CONFEFENCE ON THE EENEEAL FANKING ACT
(CNHHITTEE ON EIANI{S AND FINANCIAL IN.TERHEDIARIESi
11 AFRIL 2OOO ./ EFTIAI'IZBN 1 XX - 3
for the srnsll "
HetB naman in the name of thF mErtqagor! we ,nust allaH

assignrnent becanse -lyc:n! mqa anak natin 4 noon l,.asi af ter
1eh, schetrl. I cclllcl hlry 1;1n6. *n, !..]n the rneager Ealary
that we wFre getti_nq {:f p;:::iii)
"*i). "{ c l..!Ld malie hlrlr_rgan dito
se Etanco Filip'lirrn, Eir. r'ga7an" -in6i:is-1b1e, oLlr- childFen
imposible to hrri" l,rr,rl" iJi li;!? l.;a-r..c, ba makal:abili ba kayo?
Eh Lahit dr:on =a fj,rhahar,/ r-. i Eratr. trincii kayo rnaksbili.
ImposiLrle. f can Eee: t- hfi'l: "
CHA I Rl"lAN LALIREL. str, aFEiqnerF.

ftn{i0. Sa. a,ir:ignee=, 'then the concept is to
CHAIRPIAN
limit becange fi F chi"ldren and the childrFn of our

childrenr I dcn't l;nc:w, unlrpgg ,rre)r .lLrtra tayo ngeyon na
ipamatlane sa kanila, wala na iyc,n.
REF. l.ltrRENCl. Saan isisingit iyanq assignpps?
@ CHAIRI4AN ROCO. It's not ttre titte. hindi be? yor-r
will have to rephrase it that loan shall be rnade..,

REP. tlrally, this is jlrst E statamrnt of
li'r;r
r&ers$iho,aIefi ko. Frro that ' I vthy
let's trng ane. . , Let's relax crudit and
I eeve to the menegement of the banh haw tight they want
be.
REF. HBRENO. Improvementg. perj.c,d (, ),
CHAIRI',AN ROCO. t;L{ng ipi-Feriod natin eng
rrt{nA
L/l'-\l
7A4 /'
F L UAl.lEl;lAl* f.r lliFr[.: f:-F 11lt ] ji; i:r f'! |i il::. +i::ljlr:|;r,:r,l l.i:::tl.Ji I l.lE ACT
i L:!-11.11'1L ITE!:: i--r!,l F,i:il.l!,:.,i +i1jI_r I: i. !.lt::l.lil I r:11 . | | i:. ::: i"if.: D i AF{ T
rS )
I l" AFfI I L :irjOi:] HF''|" l.4i"ti i.liri .' ]'iil * 4
i rnp-,r-gr\,*rn*r tgl thFJr .i/:]i..1 i.-.j:i,t. I i:;vr: itiiiit L_irri- =.entence, " LC]an s
"
fia::r' be ntade tc, l-11,.i ciL,]nEr i_,f i.: iti.i i-.:;1. e6tate ar his
astgnee5. " 5r.,nieth i.r-rg i:n 1::ir+ l: it:, i'i{ii.ri:: l:,.
REP. f'1{:'REf'iL-1" Sii;e,

CHAIR!'IAN E CLr, Lli L,a'l t hEri i..ri: i'iria:l rredit. Fahala
ngayon ang bang j";o fifing gltstd] n r l.trrq rr,nseirvativF si ls Gr
they want to be aggressive. ti i, t,a'l ,*e leave it to the
@ ben li ,
CHA I Rl'lAN LAUREL.;{'] Oti. a,/ ,

..; :.r:r
o f,HAIFPIAN Rnf,E. Oka;, n3 irr;rn ha, i,:, 75 plr-rs yor_r end
j-nr:Ltred imFroveJn*nts per_i_,_-ril ar:iJ .tnlr make it
"r:f the the
l(]ans can be extended to the ownEF ci-- Lu ihe assignee. " I
have ta give it ta her, eh. LJhaL haFperr*. y6t-l compel ano
tc' put it in the name, lr;li c-r:mpe1 a dnnatlon para fny
d aLrq htsr can anct,,.
Afig probl erna di:,'aq 6*.".1s,F j. t- ,lecarnes an advenced
egtate sc ang {?Jfect. y{r tra:/ teri:es. I ;:aicJ taxeg, Iyon
ang I gave it ta her F,er,-n ,i.irc,rict t j. rj niya" Hala pA, !.; i-_,a
"r
Hindi pa namar, sila a h ,i Lr:. .l I nq fitrr.t.=l=, !c,

i I ;.t it becomes go
ano whsreas j l-_': :ii ?:i.,nt.lF. ,t.f .l ;.\;ij ,;r:.ven it to her and
ass,l.qnerJ tc i:l r:.-,iE* r-.t=s t,iii= a: i:r"r:rJ:i..1 Oi ba, anyway !
"
dePnfJF s& h;nL1i., rj,, ,:=jtr .
REFj'. f'lll!:i[ttlr., :::]: ;:il-i_r.t, i,rali:iiir i: i. [] l--r I efna . F6 rang ,

Ff fEft{ }lF J.r+ ad'-r'i i i j.i-rq 1-i; l16; i-,i:i r-, i-: i.r,:a F 1;ir-tst hirnsel f
ttle mortaao,.!-. i.ti: : :i rir L i-;Fir::-:;,:r !, :. .i ,,
i....1l-t:i
{. *,irLri red here,
A^,
Q[4
105.
ll
IM
{a'
E{INAHERAL CONFERENCE BN THE GENERAI. EAhII.:If'JE ACT
(CNHfiITTEE ON FANI{S AND FII'JANE]AL INTEFiI'IEDIARIES)
11 AF.RIL I{,{)() ,/ EF.TIAIIZFN ,/ XX _ 5
CHAIR|,IAN ROC0, No. lrlhat r+e r"ril ] ea'; is that yot-t can
lend t{] the ourner nr tt:l thF assi.crneE. -!-hat is al l , Ynlr
tran assign there for 7aL.rr credit i.riiri::h i* an intangible

FroPerty. She can bcr-row r sagot l.i ri i./an . Eh. liLrn in n' yc
crrrj
'I ..^-
-r L{Frc{
1..
-. l_.,,*-
r.Lrrrq rrl'rLJr 5r;rd l cir"crLr4r/dtJ. Er-r t ang
jt-rstif ication natin. 1"1r. Chairman. j.F r-eal ly ta liheraliee
crdi t " f'lo+-l " .l:7 r. =. trf the --;mE: cateqi,r-'r. .
I tcr. pa:/ag diri &tr.c ni tsnq ii L:n m(]ng gawing 73
=_
_i:
percen t .
CHAIFHAN L.Al-lFiEL " ':ii.r.;a.
tjHA I fil'1Al',I F:lli.l{.] . FJrii::rr-lF-r.n j.'n,.rq.!.nF .,1n: e.t-r, Laak at iyong

"Anal:. " i,!'Gnll " *r-';: !,: " " ,-=t-t=iir'.rt-:'r::.*tr. i:i rr:1r ' ma!'a1-ltang doon.
tlsbtlt i na lanq i-r i;+l:;rr :-j. .1 :':..iil:ar. -fia atin, all
F,-1-1r;rl-i L,rrrri
FVer thg i,t*i"l,iJ. j. L: r.:;:. Iria.j i,iJ ,;iii..ir'tii .-'i:i:,{ ltct h*d tO beg f Of A
Iivinq" l4hFrea= i=;=ai-]q.ia rrfi i.:,-i|ii:i iirtr Hollyr,Jood! yoLl
mnrtgage )rc,Ltf- --Eilnq ;rrd L:lir:i," Fi* i:rri !.'.' :r* iiapp'; to iend the
mtrney, Then inir-m*c1-i f .l rlcr r- -r- rr rr,.il::.ir i.n thE' namp Of the
parang registerecj nwner c_rf t_he i:liat tel nr intangibl.e or it
is assigned an inter-est " .FrrL it- rniii: L b* free from all
lncLrrnbrafices. I d|trn't linn9r, If ; h;i"r!,; :i_q wilting to tahe
the risl.;. it clcesn't niatter i- !"-1 ntg,
5$. f,6! ;17. ;IA, nid iEiH itn iir.n.:t,i. h":T n,:9. Old taw
lto, Fage 15. wala al.:tng, , , thc;se ;rtr al I the sane law.
hindi ba?
REF. MORENO, 1"1r. Chairman. s* Hcr.rge* versionn page J7.
a
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7U7
BTCilMRAL COI{FERENCE ON THE
GENERAL BANKTNG ACT
{Comnittee. on Balks,:and Financial
fntermealiaries)
April 11, 2000/,leony/xn_1
:ir,, ,ii': il rl '
CHAIRI'IAI{IHUd0 $fr$H$,(Continuins)
..- rransko iyan. Ansr
problena ko dito sa caution ay ano,
eh, one of the reasons
na nahirapan ako sa devefopnent because
theyrre so
cautious. Most of the banks would not
.tend you unLess you
are so solid. fyongr hlndi nqa kailangang
unutang, iyon ang
pinauutang. Kung ikaw nahirap_hirap
hr.ndi ka pauutansin-
5o. seeinq on this eaut.ion. etcetera. tn
any even that the
business of the bank, they will
never want to lose noney.
To ne I have a relax attitude. f think we should have
entrepreneuriaI bankers. Remcmbcr- the Wor_ld l{est,
kukuwentuhan ka na ikaw nakakuha ka ng kapirasonq
tengga
roon. palrutanqin k i 1_;r I
LAIJREI,. Ther.e i5 a portion

CHATRMAN
here, Mr.
Chairnan, in this particular
section rrhere the yants House
to incfude anonq [_hc appli{rat_ions
Ior. Ioan the financial
statements subm j tted f or
acqrri s il,ion l)Lll.poses .
CHAfRMAN ROco. yeah, okay. Iyon sa second
paragrraph
iyan toHards this end.
CIIAf RMAN
LAUREL. Althouqrh L,e are also
saying that for
micro financingr this luif 1
reguire because its cash f lorrr
bas is at saka wa] a ng financial statement iyong
linang
libong pisong loan, eh.
CHAfRU?W ROCO. fn other r+ords, nore than assete
and
I08
BICAHERAL CONFERENCE ON
(comnittee on THE GENERAL BANKING ACT
Banks and Financiaf fniermeOiaries)
April 1L, ZOOO/teony/X[r_2
liabilities
like financial statements subnitted
to the BfR.
Ang nasa taas na kasi. Are, ,t you addinq to the
bureaucra cy?
CHATRHAIV I,AUR .
I]T, Ma rry srrbstantia_[ borrower sufely
there is such l inant:ial statements -
CHA IRI'AT ROCo - Ah, yeith. v('u don't even knoH

pero,.
CHAIRMAN LAUREI,. Ang nanqyayarj Jang niloloko

-lang
nu'nq- -. paqka sa BrR, maliit ang income, pag sa bangkor
nalaki ang incone,
CHAfRMAN Roco_ Anyvay, that.s covered. Mas
genera.l
kasi kani ngayon, lrr. Chairnan, nas general
ang statenent
narnin, nas flexible, di ba?
Ipaubaya na natin sa Monetary
Board kung ohay Lang sa inyo.
w
.o lni sa atin ito, eh.
in sa inyo?
cHAr&fAIv LAUREL., Hahanapin
sa anin ito.
CHAIRMAN ROCO. t{hat do you do
virh the sna]l grant6?
So, you nust put a prov.ision
here.
CTIATR.MAN LAUREL
- ryun nga , iyong rnr cro f inance .
REp. - puwedeng dito natin i_set
IiORENO
ang paragrraph,
parang qeneral section.
Dito na rin iyung nicro_financing.
Pur{ede nauan siya dito, eh.
109
BTCA-I{ERAL CONFERENCII ON THE
GENERAL BANKING ACT
(Cornnittee on Banks and Financial fnternediaries)
April 11, 2000/teonv/XXr_3
CHAIRMAN ROCO_ you sif -l restrict crealit- you

uill
kill your ano. Mahj.hirapan ka diyan sa credit mo. Knowinqr
the reality of the structure of our taxation
ang hirap
hirap nagpautang. Baka uahirapan anq mga
bangko, As you
put it nga, silal*nismo pini_pick Iang.
The financial
statetrents*are"o'6dedr#for'r taxation in one week. At r_east
assets and at least rneasurable ito when
subnitted.
REp. ITIORENO.. Can t.'e leave it that way. Mr, Chairnan?

Can use the Senate version such infornation as determined
by rules and regulations of llonetary tsoard. puwedeng
isingit including.
CHAIRMAN RoCo. Which nay include. ifagay no lang,
which rnay incfude.
REp. MORENO. paranq leL,s feave

.o Board.
rt to the Monetarv
CHATRMAN ROCO. Oo because ang alan natin ang

financial statement rid taxes is another $orid. Baka
wala
kanq napautang dit0 except for. l.he top one thousand
eorporations and some people
are rjght to save their
assets.
CHATRMAN .LAUREL.
f guess in tirne peopLe
------ here.
BICAMERAL CONFERENCE ON THE GENERAL BANKING ACT
(Corurittee on Bankor;;gnd Financial Internediaries)
April 1l-, 200o/Leonyy'.xxl-4
CHAfRMAN ROCO- Yes, But we leave that to the

I"Ionetary Board. So ganoon nga which may include, di ba,
which may include the correspondinq. - para nakikita nanan
ang word.
CHAfRMAN LAUREL. Oca, ikaw na ang naqrpapaliwanaq kay

Serge. Siya angr unang source niyan, eh, si Serge, eh.
nf1 CIIAIRMAN ROCO- Anyway, at .least ipinaubaya sa iyo-
VOICE. So, UIR provision lyorr.

CHAIRMAN LAIIREL. And it's also t,he preparation for
the future. di ba? I)i sasabihj.n nq Central Bank. "Oy, next
year qanyan na, "
REP. I*IORENO. (|o, puwecle. I)all i 1 klrng itong version
natin, autornat- j.c na, ch -
CIIATRMAN I,AIJREI, " S iqe .
CHAfRMAN, ROCO. And such jnfornrat-jon.,, then rrre add,
"which may include" ilagray mo rr;r J.anr;, parang-., anlrway,
the wording.
REP. MORENO, The wordings subm itted.
CHAIRMAN ROCO. Tanggalin no nanq "to the BIR for
taxation purposes", di ba? Period. So that nay
flexibility. Okay. period ka na for taxation purpoges.
Di ba paranq nas nalabo or bahala na ang Irtonetary Board to
explain that. ,, Kuha,,ninyo, kuha n'yo? such infornation
a1
/l
r{r
rll IP)
ACT
BICAMERAL CONFERENCE ON TIIE GENERAL RANKING
(Committee on Banks artd Finaneial In t-ermed iar ies l
Aprir l-1' 2ooo/leonY/xxl-s
that naybe pr:escritred bY law. ell(ret'ertr' where the Monetary

Boar<l r.rill be able t0 proper l.Y evir I uat-e 'the application
r.ihir:h maY incltl(te r.he f irtartt:ia I st;rt-ement needed for

taxation purposes. I'eriorl- okilY, iyonq proper caution.
gusto n'yo pa r:in ba 't-o, due rlj' [i qctrt:e and prudence?
Conceptually, -I. hitve probl ems I artq with encouraging
fi too much caution because kaya hindi tayo umuunlad' eh'

o CIIAIRMAN LAUREL. Kanino ba jtonq proper caution?
o CHATRMAN Roco- If you do not remenber lalo na ako'
(lauqhter) Pag hindi- natin matanclaan' I orget'
REP. MORENO. Tapos tufoy pa r'in anq second sentence'
Senate version?
CHAIR-}IAN Roco- Of course. that statenent - etcetera'
#
qil
n&da
Ayun and then nicro financing such as cash flou base" '
Er.ran ko kung sino ang naqlagay niyan pero I'm sure

o
everybody f think, si Nene Pimente.l-. si Guingona, si"'
everybody who has ano ...
REP. MoRENo. Dapat tayo dito refax.

CHATRUAN ROCO. Ah, okay na. o, tuloy na iyan-
CHAfRMAN LAUREL. Ako anq nagsingit niyan sa atin.
CIIAIR-I'IAN ROCO. Pero rrawala. Ah, ito nasa 75 na
ninyo, eh. Naifipat fang. Pero ngayong nandito na, okay
na iyan. So nasa 75 ito, O. Sect.iort 40.

n2/f
a BICA}IERAL COI{FERENCE ON TTIE GENERAL BANKTNG ACT
(conrittee on Banks and Financial rnternediaries)
April 11. 200 0/ leony,/xXl - 6
CHAfRHAN LAUREL. Micro-finance din iyan, iyong cash
florj.
CHAIRI{AI{ ts'OCO.':r"' Yeah. l{andoon na nga sa Prior 6a
section 39. 4L. Standard, old law ito,

eh. So I'n
""\..*
*
o
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{.hnm:i f tr'le on rr 1..-.{,-. & F irialrrial 1.11.: .1. n {:r:rr.inr"rcl:i *r':i es;
Afrri. 1. :1.l. " iJ{}0{}./ rr.:ri ey r.: i}; X:l f *4
t ftr';. r':i.Qh !: t.J er]r:.-*!- Lrftfin ;!rci '!: i lir'.r FcrFs(;FEion nf tha{:
prtsfrc.rr'1:y '.i. i!t1!:t:l:i.n!.q.t.!, .i. r.,,i rr irrtr:r i,:i j-: -r. !-t !:i1iia ll:i- mfj" l4cl CJC! ri(3t
rfirr i'.;{..i .r {Ji.ti. L:i.!r{:: i:i.rr!t tri:ri.r'i.i!::r.r, Itiil: i:ir,iii Hr-s l-r:i fi cf the lancJ clcle*
n{i l !'l {:l i::{i+ !i lii.{ r':i .! t' ,,i'{' .i-i,i,r.i i: f!i:: tli::ur ijf . l:he L,infl Bhethrilf'
"
{::{::i!.- [:,t:::':":i! l].:i i:tit t:.1.a- ;;,; ' 1' ;; 1.;,1 ; .:1 ! i i:,., iij::i:t r':,-i: t[i* .l,iifld he .{,Cfr
[.]'i.l tir:i r', t.tj-, ti.. ! i-!t:! \t...,:!. i:r,-i l.l:,1,: i:ti-i.l i--."r _I. 1:-:r:.t .f.tlr SCrme.th.ing '.l,cj+--r:,
'f't::t' l't,::itii,:,, l.l:j :rJ:i i:i.,',' ::ji:i I lrr-l: :i.r lrt.:,i... ,. ., -1-hsi diFtirlction $.t,
i:l!,,q't (,,r r'J:: ll :i l:i l:r.., r it:'l L.r !-,:,,.i. ..rr:J-t-r::,;:ji: iiir rr{".t thi" Cr-itiC:.:ril.
(l :i. {ii t :i n i:: | :i i:ltr :
f;'t:fr r fl{ lli;'li: t

'r.l
,, l l ,.r t-r .i. ri r:r r r i:i i:i !.'ii i:r {:t ii nf .l :l. l:{:1,,,,,,
l-:tiA:t il l"lt-"'l.l l...Al.![tl:.!...,, i]:i. l:rrr ;1.!:,:-.n i:: i. i! t.:i.iin i'' rj l.:.r.rui,l1 iyan?
t:{:ll'll"l.L 1T'[.l:. iiF.i.:Iil=.] i,!i t' l:F-'lii::R.i I{.ii'i ,, .i',:.e
" $i r - Thr:y w;rrr {:
'f-c' r'{ilrrx}v{..i' ,, "" I hti.y,, ,. ,, r':i.itltt c!r, !. (:drjrlrF1: j.$ri. t((r t t-hey dec:i d fjd
.:i {.tlii {: t() .l:i.nl.i t,. ,, ,,
,:lF.l;'" ,"l li:,::].lf.l " fir :i'.:r ..ii.ir':i-tJ i. r::.;Li frrjl!'t-:'a-'n th(? cteneral rltlc]
drFF.L ies " sa .i Lrd i c i *, J. ., 5',.-1 f'f.r.lclsi uf f,olrrt, f(ak:i t
o na{:wi th|ir't,i,irJiDq ", "
{:HA:f Flay he i ynn q s$incciation fi|i

:1. awyers . "
/
1 :t {tr1"1:I{.ll.l TUa;lli Utlfilt )

Y/
777
fr.Il. l-i[ Fiit. t-:t !lr'i-{ !,.r.r,.i,i i-;!., jiii ijF-!,r' i_...:r .f.,i!.,ii i,,lG A{:T
i iDi.{l{ i ! i FL i.iii t:ii!.ii: i:t! i i !rtiii,l;- Iiri ii.lr r:rii,}[DIAFIESI
lr Fia-'[;j I L :!-n-ti:! !:.t'i !HFiji_ii j i ,i j': iII - 1
aii;i If{rlAF.t iAi ;[Fi. iI],_1,r i:i.I1I.!nr i .__ i.ar.tvpFs. Iyon Lang
he belengE tLi tire s==erjatron rri Eanli lEwyers kasi
naq!-eref. lamB E1',i. kse {:arirr!ji_ i.tt;e .J,,Er. f.laqr: I o ite.
UHAIRI,IAN liti[ii. c : r*, I i_-annut understand that.
llacr.r]
f,llAIRt'lAhl l.-iiufil:i ,. i'iat,ile, i L - ri,-rl: rraf ted proFerly.
bt]l that'g the i nte* t: cn . Itt nther r^rords. to f avor
individual Lrcrror+ers whr}se prr]pe,-tiEs have been foreclosed.
And on the otlrer side, to favsr ihe cFFporate oF the banks
so that they ceni;,t6loe tfver.
CHAIEHAH t the rosment y E'Lr dG that. ysu yril I
restrict credit_ aga.r-n ta the indrvidrals hrcause ane
cBl latrr3l yalLte nila. m3l.ltn.* ph. Fscause mayroon si I ano
rights that are not en j ayed b.r- er1c . Sn . again you f evBr
credit f Lor,rinq ts the trr:r-trEtr-atiir:rE,
fhe moanent yo!.l have mcir.e rEla). tE tl.eatment for l('t
,ffi s|aned becalrse I am an ir-rd.ividuil t t]pn the hank laill heve
less jnclination to lend to hrrn becaLrse ang lupa ko dlfes
not havr the safliF ce I I atera I va I :_ie 6= the sne nBong
korpor-asyon. Nap*bcr.rn t.ta nerfian i:,qn! Lorporasyon. Iyan
parang qood intentir:rr i:;:rr aEt-D :riq E.Lisrlrq n1'yan 5a Ferson
is to expand irEdi L tc,r th= .iilr rdrcal pErsBn and
to rr6trict
to the rtatllra I .
cHAIRt'tAH |fit_'Fit' l.:=1" I tisini, Lhe presrnt lsH is

the ind j vi drrr J a:.r rj ,,re ':n:'tr,:r;t: lrr, he =itltation
i is thc
same .
EIDAI{ERAL f,ANFERENCE Of.t TilE GEt'lEtiAL EAt{l':lN{i ACT
{ XDI"IFII I'TEE DT'I BANK AND FIT{ANf,IAL I FJTEEI-II I AR IEs }
11 AFRIL :AL'O ./ EFT I Af,'Z I!I.I I ;{XIII _ ?
ii+lAlFilttAN ROf,tr. lhe =arne. ye=,

{lflA I Rt'lAt'l LAUREL- 5o. with ih1= -'-ne. wF are. in fact.
favorinq the Hay it lsqkg" iirs r= lavcrinq individual

becanse yoL! r.Ji I i nct t;1. e c..=r' -
CHA i ftl'lAf'l RiJClJ. Ltut '/or-r' :-p la.,1s!-inq thearetical ly by

rights. Elr-i t the banl: r.r i. i I see it that therefare. bakit mo
tatanqgapin anq coI lateral ilir Lung individuaL ka.

Tatanggapin lio. I wi I1 tle encciliriqed ts lrnd on unto a
rBrPot'at iBn .
'.+UlrLi.. ll,:,irr]i. rr=n=rr i.-=cause. yolr sre! the

[l-lA I FHAl.l I
tranF:= da nct d.r=rr -tq:i:i=ts thn'! i+:,,,

lll-fA I Fl'iill''i ilill]tl., l.Jrrt r;rri i 1 ne de=cri-minate in law.
IHA I fil'lrifJ I a+Ll{-]f:l - l-lt:3r.. =r L.'ri1=,- -'=! ';eu think? ,_i
Ct{A1F.il'i*l! lrtlir !, !r:, iir=. t.ii . i.i::!li irliili. itc}, hle oroceed
with Secticn 4.n r-f tile :-ign-i rE. I ! I tic llay til I the end
then !'!E :dd '.rc,tri- "r,r,l rri th=l:anditrr'. =-: =erelnd paragraph. So
we dnn t re=Lri.f ti:i.r tt-*=stinerit ,:i r i!i-latprals are the ter0e
rFqardless lrf !..rlrFt l. 1n,:l (-, i- : f,er=!:rr! i,i]1!t :lt-F. tlrala nA itO.
Hindi na l.:ailansan -: tr;. hetcnq '"rc ti"ir rhs tandinq . ', Bpcaust
anq para Es dt'; i n. Fri-!r:r-r ?'rL1 ;r distinction iTong
'r:it =
c:ollatersl vaILrE (]r. lLtr.idial .r= er:*:.n=t natural t if I arn
the i-rank I Hr 11 rrcri: let ir: * :r-,ri f .i i{:i lltlae,en an individual
and corporat:-on . .! i.r i II _i. enei ::fi t he corporation. fieE
marf,rni ahong rrghtE. dj t-r* I 5:r" ;q=tn ycu ill ,_estrict
the borr(]Hine= (]f the j.ncj jvidlial.. l.rlfn ang epekto. eh,
119
1..,1,..'
BICAFIEEAL {:OhltrFFFhlt,F l}tV ltlE GF:t'JtiFt:';t Ffif'l!: I r.lG AtrT
itiaFlHITIEE [r'.t F.*h[i A!'lt] i- tf4Ai{t:1Ar_ lf-,it EFI!'tfDIAFIES]
1 I AFR I [- 31]r:I:l ,' FE_ l l4lvlTf ltrl i !iTlI - T
ilaFt. i t' tlr= lrllErrtr'j{i 1= i-v|r.rq =a t-fiiIy homen ttren r*e
isillFte th;(, ,l' lr=
l]Hi+ I Fl'lfiFl l-ili ,r'--{r ! {,i';r -
llt-lAIf{f'ifihl Htil.,:ii" 'dr-: r; -vlrn th3l.: , i.rrq danqer nlyan!

sl'rtrpo-qinc !,IE =r1.r ti!3i- r.!r:iE!= jl f f:E i'Eal sEtate COlletEfal
i5 the fami1y irrrirr,, " iii.=i:. r,-ri-n t=ir- i:':j jr,'an by the CiviI
Csde. Ci i:a'i: l nr-!r ':,:! tr.-'..i: r:{i r tr3 r i! rights ar ari
n individllal, Ll:er' lri.r,,ii i,i atrit!:irr 1:i=hi --r: .:errr-
If I have :i-tr-l sriLlar-e met.i-= eh r,atrbatrey ka rla ga 1OO
arld iyang anaL kB ngayt]fi irrsqtrapaga!.ia dt]En =a Bther hundred.

hindi ko naman pdhihirami.n. eh. rvcns femily hsme! hindj.
natin maklrkLrfr.l i.!'iti1 . l,{e13nrj b:inql Errq fifqri-releese, Hala
l:ang nal':uha, eh.
CHA IFHAN LAUFEL. Fero iyen, EnE l/EaF lang ang-..
CHA I Rl'lAN ROC(]. Ne, it doesn't mittrr eh, The ,noft.n t
@ you have more rights sver a rorporatiBn. ysu $ill lend tt3
the corpora tion r,r,, ;iiiryrii,so, the additronat righti to the
individual makps ii'i.t nclre oneroug f or th bank. Fo, the
bank h|ill just avoid the individua]. bekit ko lahihiremin
iyan in the first place ta.lassng raalang pambayad iyan,
eh-pagkatapos mas; naranli pang riht=, Fatay ka diyan. It
has the reverse effect.
Iyrrn narnan sa redemptivE perrtt:d k=sj.r the Equity trf
the redemptive peri(]d hesi. iyon ns nga. Lrnat kang Fur{ede
nagtawaran =a ivong fDr ftfreclsEijrE. iing nangyayari sa
720
Fif,Af{FRAL f,Ui.tFfiFrEt.ic[ *t! iliE ErtqEt-ii_':i. i:igfl,$.iHE Af,T
i trOf"ll'l,t ifEE A EAhJl,. ,1t!lD tr 1i'jjjlf.llt L:rL ii..,tr:I?HFEIARfES]
ii AFRIL ?tlult ,, EF, IIAI'it0t,.l .j HrIII - 4
atin. papa -fcre{:lB=e and then at Edi;= makilii5ulro. Sor ang

hrrap-hirap Fsqliatail*= 1 sm =.r.r!'E nangyayarl sa inytr.
puFunta sa Chairmen Laurel rrf the F=nhs Conrnittee of the
House and l.: ay {}ha i. rrnan Roce (]f the Eanhq Carnmittee, c}ne
weE,k na Iang pE paaal isin na !iami 5a trahay - Eh bakit
nanan ngayon I ing,}i|trayo gaga 1 a?r? Abe y naubos na ho iyong
ano. StJf hindj. lq,a l.mFkaga I at4.
CHAIRI"IAN LAUFEL. Can ?.|e rn=t go bacl.: to this?

f,HAIRfIAN RACD. O" Lrrnq FLlHrde ipaubaya na muna
=ige.
natin ita. hindi ba? Fecause nahihirapan tayo dito
EE.nrEFtLially. kay. ue'11 qo bacir t= +i later-
FE require.., tlld law itE. Fh " Arryy.ay I ikaw Eng
taga... - aEquisiti(fn (]f real estate tjv vray (ff satisfaEtion
of clai,ns - trld I aw ba ito-,'
Other bdnk"tng services. j-minrdify {modify } na natin ito
iyonq sa bank holida)rs, Frahibitian tn act d|s inEurer. sld
laH" Ft-r:hibit rr: tr=ur=:ciiorr=. h:=i ra.l I,r old lan. Fege
FEF. fltrREFltr = flr. r,hdirm;n. =e tic,LtsE version Ba page
IHAIEHAIJ " Anr,rrl =ectrln ,,

F:l]Crf
EEP. l'l8REf'li _ I am ir.r=t ber.nr: n*ided by the natrix,

sa risk rn{]nitBring
=:.,5tFm. f,l t!r$1igli this is Srction 51 .
t,raleng Senate cr_-run tei par-t "
I]IIA I RfiAFJ LAUEEI. I tir. 1tL] " i-;i, Srl.rdential standards.
727
FICAI'IEI"{AL C{]'qFEREf'JCE BN I!.!F GEFIEFIAI IJI;T+I.II{G ACT
iCtlt"lf'l1 i TEE [r,t BAtit; AhtO F tFit]titiiit_ it..it ERi.tEIIARIES]
11 *FRl i.. lt-ttlr-; ,' EFIiAl'iirii.l i .{i{ilI - 5
trhapter- IX,
Ci-tA I fti'lAf,l LAUftt. hir=t monitc}rinq_
REF. HAREFIII - 1 tur i :long sa ir*Ee j ,
{-HS I ftl'lAt,i EiJLl , l{u rt_r=t- r=rer ir:_, tsa=eI _ It's better
ic r-pf er- tc the Fesr,i , i,.tr at]e;-,_ t ilFi [!-=p]
=tandards for
Fatpr! t ia,l ={]firtI lllnrj. rirrf,l,5 =e=t j rr-:,
i DS LtilhiL -,i F , i,- i-tt.!-i I iriir I r"li.ii. Li\.iEti " !
.o
BICA-I'{ERAL CONFERENCE 0N THE GENERAL BANKING ACT
(Connittee on Banks and Financial Internediaries)
April 11, 20OO / Ieany / XXrv- 1
CHAIRMAN ROCO. (Continuing) ... Sectlon?
CHAIRMAN LAUREL. Section 33. Itong page 10. Section

33.
CHAIRIIAN ROCO. The DfS Standard referred to... ba't

iyon? DfS Standard, wafa, eh. Bakit nawala iy on?
nar.rala
Nandoon lyon sa origi-nal natin. Hindi nanan iyon

tinanggal, eh, because it seems..- it ailhere to the
international standard- Bakit nawa.ltr dito ivon?
REP. MORENO. Anong section iyon?
MR. FLORES. Section 33-
CIIAfRMAN ROCO_ Anonqr porLion diyan sa page 10, iyong

Risk-Based Capital , shalI, to Lhe extent feasible,
conforn to internatiotral ly accepteci s Landards - . . ".
{' RllP, I'ORFINO. Eh, kunq itonqr sa flouse version, Mr.
Chairnan, f glress all{l inl-ont.iorr ltil.) ls wtrere to be
nandated to estal)l ish_ . .
CIIAf RMAN ROCO. No, I under.s lilrrrl f.ha L . f understand

that. except that_ I do not under.stand what it saying.
It's so technical. it's riatrgerous Lo depart fron. f
aD
ing to consider DfS standard, di ba., ft referred

r.rif f
to
the DIS. Bakit nawala iyon? Nasa oriq_ina_t report
iyan.
MR. FLORES. Eh, s j.r', it's always
been. . . (unintef f igible)
pe h,r
BTCA.I{ERAL CONFERENCE ON THE GENERAL
BANKING ACT
(Comnittee on Banks and Financia]
Intermediaries)
Apr1l 11, 2000/teony/XXIV-2
CIIAIRIiAN ROCO. canoon ba?
MR. FLORES. yes, sir.

CIIAfRfiAN ROCO - t';h . saal iyol lumalabas na ano.
MR. FLORES. Kaya iyong parehons version parehongr
talaqang maganda an(' irn() na L.Lr _
CI{AIRMAN ROCO. Okay. $rnokinq break."
SUSPENSION: 4:31 p.l'r.

RESUMPTION: 4:.-t6 p.M.
CHAIRMAN ROCO. A bank in tlire needs;, we nust leave

with the bank 'par.alizeri. d.i ba? ,t r:enr:k ko rin doon sa
Bangko sentral, doon sa... bakiL kayit nauala iyong DfS?
Paki-eheck no lang bakit nawala iyong DIS. Ito pa-
The Monetary Board shall, Lo the extent conform,
anyway to the extent feasitrl e. di ba? I mean page 10. ft
.o says, "The Monetary Board rnay require that such ratio

deternined on the basis of net Horth and risk
be
assets of a
bank and its subsidiaries, financiaf or otherwise, a6
uell
as prescribe therhioodp'sli'tion and the
nanner of deternining
th net lrorth and total risk assets of
banks and their
subsidiaries: provided, That rn
the exercise of this
authority, the Irtonetary Board. .. we're restricting it lang
to this, ,no.
a
REP, MORENO. or Mr. chairnan, doon sa paqe 2
"\Zr.y,rf
I
BICAMERAL CONFERENCN ()N THE GENF]RAI,
NANKING ACT
(Committee on Bani{s arrrl Finanr:ial
lnl.orrned j.aries)
April 11, 2000/Ieony/xXrV-3
Policy Directipn; Ra1.ios, L:ei li.nqr; onrl t,imitations

dahil
nedyo rnas broarl iycrn.
CHAIRMAN ROCO. Oo, anong gaqawitr. Dito sa Section Z?

REP. MORENO_ Oo, dito sa pof ir:y Ilirectioni Ratios,
Ceifings and Llfl.itations. The Iianqk() Sentral provide
the
policy direction cases.
t: CHAIRMANRoCo. oo, that,s in the Constitution, 'no.
REp. MORENO. Oo. Dito sa second paragraph
ng policy
o Direction; Ratios, Ce{iJ,ings and timitati<lns and other forrns
of regulations.
CHAfRMAN ROCO- But this is nothinq, etr. Decfaration
of principle is not attached to this. to rights and

everything- Arf r an saying is that it- is not attached
to
this because it says, ",..shall, to the extent
feasib]e,
conforn to the internationaffy accepted standard
.o Then sa Banqko Sentraf uhen they !,/ere
of DfS.
doing that, ayahr
tafaga nila ng DfS bank, but durinq the
hearinq, DIS they
were already accepteci. They worked
tol,ards it-
REp. MORENO. IL,s int-ernationa
Lly accepted standard
of DfS -
CHATRMAN ROCO. Is 1-heae arry ()thr,)r?
REP, MORENO. Pllr.'ecle ba, puhrede ba alter Lyan?

Puwedeng there cou ld be another. , .
--.. ;,.-l.l, ,, . *--

BTCA}IERAL CONFERENCE
ON T}IE GENERAL BANKTNG
(Committee ACT
on Banks and Financiaf fninlr"Oiaries)
April 11, ZOOOlIeony/XXIV_4
CHATRMAN ROCO..But right now it is the DIS, hindi

ba?
Everybody seems to be the ]eqaf
forn, Lhe DfS. Conforn to
the...
REP. MORENO internationa [Jy accepted s tandards
including the DTS. They had a poinl_
dalri.l angr DfS also
refers to natters other than this
basic capitaf.
CHAfRMAN Roco- Ah, yeah,
but we are saying onfy that
in the f is.t . So wliat are you say
inq?
REp. MORENO . to t:he exteni feasible, conforn
to
internationally ac,cepted sLandards (jotnna including the DIS
conma relating to thi s risk_based c.ap itil.l -
,,
CHATRMAN ROCo, O. itu t{}y na nat_in ito.

Balikan natj.n
ang DIS na iyan. Drt,rn it p;l(JC l0
,!_
fl i r o ang gusto mo ay
conform lo internaLiorr;r1 ..,
inc_Lurling t_ho DfS, ha.
REp. MORRNO. In,: tutl in13
.o doon na sa Section 5 par.a.
..
1.t1e
po1
Dts. trr the first year
icy I).i,rection; Ratiog,
Cei_lings and Limitations.
Magcladaqdag n.t lang tayo dito sa
second paragraph. ,,I,he Iyonetilry
Iloat.d may prescribe
ratios, ceifinqs, limitations
or other Iorns of reg,ulation
on the different types
of accoullts anrl practlces
of banks
and guasi-banks. ,,
CHAfRMAN RoCo. Ah, there are ano.

When you say,
"...shaff, and confor.rn to the
extent feasible,
72
BICAI'IERAL C0NFERENCE oN THE GENERAL BANKING AcT
(Connittee on Banks and Financial Intermediaries)
April Ll, 2OOO / Ieony /XXIV- 5
internat.iona_l ly .rceepterl standards j ncluding that of the
DIs... O, sa page 3, puwede iyon, line 6-

f . - . percival.. - . .'Mone1,ar-y Board nray prescribe ratios,
ceilings, llrnitatlons, or other forns of requlation on the

, dif f erent ty-pes of ;rc(-'()llnt s arrd prat: Li ces of banks and
quas i-banks . and sha-l I ensur.., to t tle extent possibte that
it conforrns to jnt.ernational ly acceDt(.){l standards ineluding
those BASLE of interllational ^setup, . So it qroes there.
Para may dagdag tayo as a directiorr- we're running out of

tine partner .
REP- MORENO- Risk Monitorinq Sy:;terr.
CHAfRMAN ROCO. So itong Risk Monitoring Systen,

alisin na natin ito. Iba ang perspective nito_ This is
ft f or the bank na about to pro.l_iferate.
CHAIRI.{AN I,AUREL. okay.
CIIAfRUAN ROCOll!,f r.i$kay, wala na iyon. Nasa forec logure

tayo- Page 17, nasa forecl.osure tayo- These are all old
law-..
(DS ROI'ENA r. PENEYRA TOOK OVER}
ti;l {-:F "ltr:'{i,t.. t]fil.il:: t:. t;tLj i,lt.rf:. {...{..?t,11,1 l: f.I tjilli
[.]cinm:i l i.c,rtri Ii{iir l,,i:i jj;r F.:i ii.,.f.i i:::i,,:,ll. ri
A,:rr'.1:.l :l jl ili{)(.1{)..'trs:n rr
.1. i: 1'r r.li:,,: d :i. ,,i r. :i r+ li
" n::. .:..4' i, r.t -I
t-tl.lA.{ [::l-l,orl''i l;iU{:i{i,, { q:i:'; n :i.'i:i .r ,.,.., iJ

[. :i. r.r i:r.t ]. *r,.r :i tr;i , (f l,;:ry - :f
ain *n 1.:it+rc.l::i. an i.,,-:j . tr,ii
IIHF . l'1$t1[:,{A ,, Ftr " ttr;r i rm,,.r|r ,.
{:,{A:f Kl'lAl,l an tr"f p,*;i.:=cl,:. ycjn ? l{hd tiver' ,,
wh.rte'ver.,, y1.s11q,
Aprl,l tr,i h{I!-1 ,.i ).{:j }t il ,
"
CI"IAIf.IF'AH
Ill:rl-c,vF "
f,l-rAi.rrii*iriu li*ii:i.ncrne pi.-i:pnsal itr:,

l'lr;rIr?
'
{:f .|ri I }ti,].iFl tt{:ll:r.l " li;'.i 'r-ar..

{.il.l6r.l.ltf.lril.l t.../rt.tRf.:t.. i:i{.nr:t i cir.! l::,, :;.1
" 1...i r.:.t i c]t., fJ';! | .r t).:t t t I.i
tiilt.:r-t il not (Jii. rr:,ct:1. ), e:,.tq.:rcJe in i n.*tr,--_rr.l !:ci !lr.r:i:tnes5 as the
tfi!;il.lr(.3r',r "(3ti(:eFt" .;/l.rn ylutq i ;i n -f. rrf!ftin
1* :i- n cl :i.
pprfivir I
Friclr a
cj'f Ih('} I'lfinei t.r r.], Iifi"trd,,
f.tFlfi J. !lFh:d.l Hil|:{]., Ti.!i.t {:r . i- .i.l .lr

,-l r,.i"__iri.i: t_arnper ar.clrnci
tlilli li*rlrl';:i.nq ,,,,, i: ir!{j r:l_:.
l-1r-r t.ti:t..'1,i .r.l 4ir irjn{ h:i-nd j_ ptrprje ydrn.
.[t's n*1. r.,,r:i. th:!.rr l; !.ril. 1:.r:;,1,:L.i, ,:]J, _l:
hi...:, !.lli..rt: j,..r lr irio*r,r.,
[;:l::.1::'," lrt{-ll!l': t,llJ !...{r.i niqi
" i:r.r r,_1.{_.],_,* ,, i,l,*,. C,l;i J-m..1n. T.i,1fincJf}g
l'lt;i ;i.i ilict.t tt,,,r_-i,, ni:t,..r.:..::i , !,.,:.:t;i ti:t.l:.1 .,:: :,.iitii.l h,f n /,; &*,**filnfi#
ti'tt't.tr:trrltl,, lt;i.i1..,, r.,r..r,. : i.j ,:,...t. :::.::
r: :,1 :ii.t\_1 | | ,- t:tn ,/ by $y
,::: I. W At
:i ii:i.i-f,r r'r {::r.j *fr .1. r: l.l:l:i-i;: r:1.1, .i:1.,i,-i:ii .r:.,, i..,itF. ;-,,:,iii,.c
,_t.p nOt gllpp,,Sred
tfi {t.l,.rr.,t,.i tc,i.? r:i.t hi.,,, I.ir...,i: L{it:i{li ri,-_! i. ir..i] 1;i.;..r-. _.1, Cre(lit., IiA l,l*
{:1,)t! l:}t.t,r-f:i{;r*+:1 rJi..l:r: :t gr i t.: .i, t; ;1,.;1114y,..1i..i,t
i,: ...ir!,i-, .!:r:lil fteW Ff OfJltCt$,
t-:f..lrr,l;f;llrhl,Jtl l:i{-iijf.!. iirr i .i .i,
ril.:,, i.ii:\rt {t!.I.,nt,. y Foercl #ifi
pr'+:'sr::r'i. l::cs., kl.!{: :ir.r 1i,i. iJ,,rr..,{i l..i{i *i.,1 .i.r,...1.1.
t.rq YE:finv' yut\c) nqa
72e
F.l. i.:d:'ltl[a.]:;.,r:ri... i-tillli:: l;:.tr|i.,.]{.:ti.
i::u!"ll"t]. 1..}.ti:.fi
i.:r:i rr!:i 1: l{.:il {iri $*ril.;:i ,! F:i.n.f ni:::i..,i..1
.[ n .l r, !...1.:i..nil .r. i !._;r c?tii
i:]l:i i, :i..1. :1.:i. ,, i_...flt.i0,/;:le,,:n e.!.r,?.,rX iii/
-,1
'J':i ll:*,.'r.1. f i.Lni::

!::i. i:iri r;i t-,q {i.r!t.}{:t l.ir,, i:;*:1.1:r-r i, ,,ri::, 1-!:-..n*,1,,{:-t ,}1..i th.j {:tlis+r
(-EtFt l:h,,rt .rre-- si.l.rirt.i.;* h,.tcl::i.nfi.J
i:..iii
.:r,.r:li:i:,. t and m{:]neiy.. .I.h:i13
{:rttsl h'ii:i nt:1lr:int:1 ,,

",, j.!: l(:r.t: nii :i.i;n .'r-i' i:+r1:*rtir,e n.f t}tel
l"l(lrlsn t;:it'.u' l:i*,irr.-ri,, -i.li-l:i. i:*?
iiir.r li,,r,:: 1ij,rtLi.l.qr Fit, Iiini tc] qiv{ii
t hti:rti f'l.lr'? {:: !::ii:r|l$ ,:ini:i fl1.1.1;i_se t I.r.r.1: *r.=
cj:j.-;,.i, j r:r.r.l..t ta c$ffiF:1.,/
t.t:i lli., h+ li..r Jit.tt:r:r .:r..;r.-: l::'t ;),1, La, t1.1.:1t-tt.:i1,:.1.t.:,. Ir,:!r-nnq
*=x t r.1n .?(31,t._,,
li:i.rttJ:i. l:io,, {it.rt.!t!-iir*-rtlr::: i:ir:ti;::.t r;: i !::,:,r_r i...i. iii:; ,, I,ii. hind:i l:t;t
lt1'jt(:l t.j+ i::i.!!'i d i::' l.:t t.t-1t.i .,.. i.:,:i{!,t...1 rti:r :.::-a,!-t+_i.; i..r.,r.tl! i:r,tari ars FLl Fnrr .lii .,
l:;if:l::,, irlf'll:,.'j: !lii jr,; ii.r-l.i-.:r i1.:, in ji.tii;.r ,i,.r

i.., l...rlcl Il anlrr n i\n ql
i.titi:.t.ii-','t :::r .j,:i.i:*i: i::i ii.i. i..i :i i:.:., !:i.: : iri,ii_,

,:r tr i. i;i. .1.|, .i. fii,if:{l tn i. n vr,+g 1:
rrt, r'!, i:'.,.j :L |,.,r.-.j
i..:l !i:'r.! lr;:l'lrit.j !:itiii ,i i:t.j: j !r,::,, ::;,_]: -, f.-,.,,,,:i \. fi\..i...L l.ln {l(*i. t hrr
.l ti*trt..:tii::(. i':i,r:rri.i i::,:; i t.,;: j.. t
ii.l .: !r,,:.:r
f;il;r.f:,.,''iljr:..-!::.l.iii ir:.
L.ll-ldi.l.i:iiilii.l.l:;ijj..ij, rj'ir,, i,.-r:i.,,,..,, j:.r : .1 . , rt :j.ilil i:i.* I.;*n:il.*"

L: l-!il1. ,:iJ'l!'rrl..i i. . . lir j l . i f; j::
. i i.it .,.j1.. i ::.i,.1::;,
{:ll-.Jli L l;jl"l.il't l;ji.Jt..'it. .._..ir::,

i.i.ji:.r.i.i :j. r.: :rj ::,,, i:if1..-,,.1: :r. l(j}.,
lll"lA l. fi:f'1J 't 1... iii.ti:jif:.!.. ,, it.r tii,:1., ,.ii,; i
{.:l"lr:r 1Fjl.!/j.tlil !:i:{.:ti.:i.i.. ;i.rr4 !:j i r_tj..r :.,:,r:, ,,t::.j 1:.,j,,4 nfiH,,
Fili:!::, ,. l"!(il:ii::.1,!f.j ,, ili: i::::,_.,t i.. i:: :j. ii i:j .,
j!-!itl.l;il'lr:il.l ., ,j
l 1...i:il.lFjt !_ ,:.,:
iJt.l.t::i::l!;-:.::.!.r.ti:t ,, r r.,, 1,,
t''t'JAl'fil"lfihf Fjll{:ll .!r.rr_.r F,i-*h:rLhiterj r:i .,,,r:r.

" ijrrr
fi.,t lt;.ri::!l:.:.
;nfin. Il:iIrrJ:i narrian ",,,, .:i::(:r...,F.t: j.ricl rJ(.lrr__,i-r j.Li,r :,: ;r,r.,1trrc,,
,tHI:'" l"lUJ:l'rhlfi " .t.l.Es h* ,v11y_11tr {ti;:tr:t
- ri: - r\ rJ.!clF.: nq
"},fr! par.tnq
E!
tii.-r gr.r[:-.cr:l.r'tr;l(;.f_ q Xl.lnq EcL!l-(::il-ti-l irir l.:i

UFlALl?Hf-iH ROCU" ye,;rh,,
;r?n r:r_.ii I i-{:i. ri f ni{*r,f ,.i s /'ng F;tAr.an(.:l
1,|
i
:l
:l
a
ii
':1
i
'
I
:
,,, ':.:r,..+ i ,, ,l: i.:t : r, I
ljo i -r:ii:::rl
t:
t
i
l.c
,rf:iti:i. :-Ji.:iJ
:
,i
l
a, ]]'..ji.
I iti,l
I
', ]':. J:] -
.
:,,rr: :,ii:1:-,.'j i r-r,::,,
i.:
:.i.: j:.. |'i..: 1' :: \: , :r:i ,,
,, i: i . ,:jr 1i.:: j..jr t
: :..1:'.. I i, j.:i:.1 : i:.1 it ::.1 , - :t i: 1:.

.:. .i. -t
! at i- t:r-, i i ,,:, r t i.
ir:rt,: I ii iri :.:1.:.a:,.
i i ji:.r ; :,.:,:r.: , j i::ljji::i:: i t.: ir :
; ! . I , : I .: : ;r
j : : :
i I i:: j, tt, :::, .t
,
i ': l.::ti.tii
. - '.1.;:1i 1;:t.i;.1:;, t,,r:r | .rr..t. ,. ,r ,
r:.:t .r,:r ! i!,i, ,-,,ii,1 i*,, :

!.jr.ri .r: :r .i
ititi:1 i f1:itit!i:'1,
:-:, :1..,!! il,,r i:,:t,i:
|'
ir
!,
i,
130 i
FICAPIERAL CShlFfFEt';;]E fii,i THE EEi\iEIi:i-, FAt{tiIN ACT
i f,AHf,!ITTEE f,i..! gFtl.! tlS f; l Fji'.I*i..jf,j+t : i..rTEFtiEDI AR I ES )
i- L gFR rL ?ii*L: ,/ FFTI+iiZCfi "' Y.x.i i - I
!]HAIRHAN RflCU. iil=r-i':iiiiri.rij j dalewa, unless y{3ll

have strong fee:ing=, Fabr:.aan -,a n;tin? Fraud iyan.
Fraud kasi under the riyii rnde Linl.=Es =perifid trr unless
ano Hili not be.., is nlt articnabie. So, r*hen i.t is a
false report or ytru.rnisrepre=ent nr ;; *:ir E,jpF;-ess a material
fact, s6 it
misleads yau. tht .i= f i-aud. Kung ,ninsan
j.
=asabihinr hi.nd lang =abj-hin Ea iir:]: i.,:;rini-; isLEad ka. Ss
Securiti*= Act- *iayr*en ,ling eqr-ii_ '..;:.1.*:: t itrair.
CH*IRTIAN LAURIL. h+,- =:h= ii-li= i-- one of the
CHIS I F]1AN RICS

= Y== ,
CHAIRI.IA LA|JREL, . " " behavi=-
=f thr e:ia.Biners that
he =hauid fnntFol. . T+rr= iy'*ii .
CHAIRI'IAi! EfliC, Ye=, nl t!-.= *tl:=i-
o bank secretry hand
naman iTtng t*=li:i
=r *:--;-;-leciii;1, .r=i;itg prabationary, I
dsn't reareinbEt- i:ttij;E =!it; =-..j ;:rr;. destrltyE the
=ii=itiy=lZ
ball: =ec.ef Z bei.:t,:== ,:+=-t+.i z:-.= i:,i:r:J iq;" i I they keep q
sscret =l=a ri:. 1ai:g" -. -.tnai i=': Ji:. j;1aixan.
.o kidnapper= ;1ar,-: ..t'l= 1.,-rr:;
=:.r..: -,r:-ri: i::,-
i:=
,i:idnapin.
So ang figa
fyon, gO
appi-t-ted. :::aier;= !:;1r.:31;; r:.:;-;+r: , i .:,,=:]',_ir), This is the

bat!,re '-f i-he ---:
=: J,..a
F-:EF " Iifll--rEt:-, '-;j- .-r: i=i:l i .;; :,:-; -..r,,= -
f,l{A:El,l*f'j Li-t. r:-, ;:al+=ii i:;. ipprcvedo okay.

trHAIRi.l*t'J irii.:Ii:i .. I ir;.:; !=-,=::: ,..Ei-3i*n sa 54.
trHAIRHAI{ FC{;ir.
=.!.4,
a
ijAtiERi;L r_:Eiilii.:j i=r+i;i,l I FIs ACT
=*Nj:a:iiEi;rE fii.j T;.iE
Ei I
ia.!i'll''lIfi--E'li'! E*t:'r..: ilii= Ii;rrijtlEtIsEIESi
i i. r1Ffi I L :riri+ i [i-': =:I,i:i'!t:+i._
! Aniritj ./ i>:,.,t ! - 7
IHAIftftAtJ L*UFEL. He aie J-=f Eri-:--ii; tI] the ilew Cen tra I
Fa;h A.i! ifirrr':Ed:.aiEiy e;rciude bank trtrm haFirlg -
=r-r-.ir-il=
LdldEi"an aiat:-* -E =Enii.r.r;1 , . .
lii*IF:f'!;]tl FiII=, a':.-: a,qi:.j -.:-,.=.': !::ia1, it* ka=i Fergist
in *n iin=af = it:- r- =nL!;r= ;1,*trt.a,- - :-: .= i_=.iaEeng dapat naman
anri rapii=,1 Fl r-,:i-:i:i:i1+ !.'i.- ii:,::i.,:+ ::+r.=i=l_. di be?
EFi:'.,r.1*F;Fi.:.. li:+ill= r.:=.'
l-l!j-3 JEit+t! :-rlir::li. :r':,. i: -iit=:i-:==;, r:-.i -i= hiitdi rnadala sa

irr; j,n. i-:=l--i I :..,- :.,-':. r:.r=r : -r.',-.r= na ito?
I Fi'":+l'! i 1':!:1-'r, ::,_r, -:'. ,: ::r: ,-
=qvered br* the
:.--!!C -:::: Nrt.J
l=. i_ i'= I ii:r. .!. I , i: .
r,:: :: i., !
: ii= 'a,EFt wAiting
CHAiFi'iAi'i Li:.i.1ri:-. ::::= == :.i. I I ::i:,-.r thi=

[lJAf F|-IAN |:-tl-:;il - i:]+: r-j; ienc i:r-;ijg.--!r. nanran ito, efr-
CHA IRf,iAFi L*-S=i_= :1i]. -. i=n= i-===::,,--.dent aLtCitrrr_
CHAiF:1.!AN l-;-[-, i:, :r:jeren:er1: F.Ltdit{]r, rilal rnga
ri-rteFeSgrS iat- " ,-i..;.., .
XH* I fti'lAil L+rrFi::L I i*

= =-,.i .::n:.i..= i:.Li!{an r eh. Ang
magbabayad ng independeni a;d:_:;;-. t:.,r-. Dhai!-,nan, ay iyong
bang ko .
trH* I RflAit ScCfi , C,: -
f,HA I Rl,lAN LRUfiEL. F=rr, :;i;g i-.l:n,: La,-y Btrard ang mag-i-
engage, Fal+gay !;c, ;.;h+.i iFjF iar i,: i= tc just have a l ist
frs in the fici;=s ,ier-=i=i_- r-.lf r=_=tii:+::1= *:rCitors acreptable ta
!.i I iAi.!tri:itr:_ iiai lili.'li.: :l i|: 1i il a:i:ijlii:,i.. Eff+t;ttUU Ott
i ;ii:'-il-t i TTtr= Itri 5.-:i ii i :r:'.i:l: i f.l+i.l]*- J rir li:rf:.]t"!EDIARIESl
i-,:- -i i::1 -, :r - r-r .-.r.j-i.r.i:lii :l:iir'I - f,
.-nE i-1,.in=i.-:i:r q=:.,:. !:rt ii i=l ,;:iri. ::,F!-,r'= i.i;5 $;i5te1-E. They
i;:i pr'=babi:.:. -=-i..-..tji
: ii:;'.. i: i: -',+ l;l:it-;i E;n,t; Sf the feSUltS
':i aridit i:-i :,i:;-:::,': i:., i., r;,ln:'i :,* ;l=,f

= i-==porr=ible to the
l'l(ftretary EGE-d eri tc tr,=- l,16i-.: ,:: :jii-=EtEi-E of tfre bank -
Dalah.Eng r!*=t=-s. i i=:,.={j -ent-:r: F.i:1r-, ir if they a|.e willing

tc Fay J,:lr- tlie E;;!,Er.iEL ;.riCi +-'-- f- ri' r-h+ cornmercial bank.
They are i;,1., ,r,1i_ iriiliril LL-r ;'=.::
':ertf
@ f,HAIRilAii FUII. E;.:i-,1 i.r,En!-* i* -i,r*" Fercival?
cHAIFtlAi-J LAUFEL, C*nirai i-_r;* =!^ tr*. ipntral Bank. l::
o CHAIEHAN ROCT.
pref ers thi-s, ganoan ba?

Eut appare,-'ti;,i. the Bangko. Sentrai
An'E i:;rp:-e==i:ln tier kay Euingana
i tt: , eh . The t lbnetery Baard a;- - . ,
'].;r
CHAIRI{AN LAUREL; Oka'/ iyon;:
i-.i.-=t =entence.
CHAIRilAfi EAC0. bl*lang problei-,; 1'-r=ii - l.lay require aln
independent aud j. tfir, Ei::il.i. f :':e- l:-i= tg.m ghal1 be

pre=ented tc the i*i=rr=i;:-,,. E*er-d :ti:: r,-, ir,+!, be cantinuintr. . .
ang l4onet;:-y Br:ar-d i= ii:.e =ir= i!-:=i- 1r==rribeg, Br-rt thev
o r*i11 bE re=pori=ibIe t;
board.
ii,;th .-h= l.i,:netsry Board ancl the
CHAIRI1AN LAijREr . I;..on, iyar; Er.-,= necyE sbjecti.onable.

CHA I,E!YAT] E+CLT - f ! *:r -;- ! a;.- ;1;= l.: ' .
;.:,:_r
{]ltAlEl.l$i.l i *:_lFjf i_ = f::1..:..:;-! +=.:. i=a lang ano, iyong

nAE=Lr5ui.Je 1d* !;ir,-= =
tH$ 1,qllel'; tf l= . il;: " Jr i ':
IHA I Ei:_lr] ,_+1 tril!, l-: i i:;,:f,':i !t. i ng kopya iyong

=ng
tj3 ?w
EICAI'TER*! trCNFERENf,E SN .r'H[ ffE[IEfi+I FfthIiIING ACT
{ trilHl'tITTEE Bil FANHS A}.jC FMAniCIiiL INTEFT,.IE} IARTE5
i
11 APHIL ?SOO
,/ EPTiefiI*t{ ,.' xxul _ 4
C*ntral Bank "; Ita. ,Jilrdi ira? Iton. matataranta

iyrn, iyong exte-nai audi,t*r, eh, C,riayia ang nag-u-Brder.
f,HAIfii{f,i.I ftEil5. io,, j...j j--==i+t= r;.i_i.r itsng ,'=hall be
re=pcn=ible tn 'i-he b;nir=, *t:et_e:-+. !:,r! the retrert Ehal l
be furli;hsc ic, i:re i-{*n=t;iy
=il;r-j.',
CHAIR|,IAN LAURL, Ce, i:/er-, .
CHAIRHAN ROCO- SF, gsncrcn i-la? *f,-d then! s(] if l.re
mcldify it liliE ihai, Fljt,'edE iin. "ThE i']cieFendent auditor

5hall be i-es-ncfi=ihle ta l-;* l.:nl:=- ln=E'i-bantE or tr gt -.-
entities, b*er=d =f i:i=erti-ir.=. iii , :, :,---:r' cf their repert

shai 1 b= tiii-n i=l-:.=,i t: ..i.= ii.::i r= !:t-,. ,'::=;i: ag xel l . ,' How i-s
CHA I Fi'!+i,i L*lii-:Fl_ = 1y.Jng " tsLrt tD the

=i-..
Picneterl.. !-n;.:-d . "
CHrllFf1+i,i F=i. = i-1-, ..,-r..::
: :-:U.rr ::, i. ihe report Ehal I be
fitrr]-i=l-:eC iie i;qi1-t -; i--r.. !:a+! ,j :: ,-.:l: i+ Iooks the same
pErii irai h.:1 ,
.o IHAIFi!+r: :i.liit. :;-r; i;.,; ;1-:_i rii:r i;apla lang iyOng
CH*IFI"|A!.; FCIC. ,;-* i:;i !:ir;;. i=-r,, {jf the report i=

given tc the !'l=-=!,:r,: Fl;r;=
== f.j-;: _ Fc, hre retain the
i{6rds bl.lt ine h*.v= tr:i=i 1.", ii-:i,c=t-: _._i;: :=rtrept.
Fuhrede na
iy(:F.?
f,HA IRHAT.J LAIJFiTI- , Li. _=.n= lir.i. p,_:r,:;d5 na iZBn?

REF - H0FEI|0 - {1!:
=;r
F:ieltERAL f,f,f,ttrEFirt",if,!: ntJ Tti= GENIFi+L Fii,;i.:. r i.tE ACT
{ iti,ltt : TT=E ilt'; s+i.iit! *tit F i i.i*i.it i ti_ i i..lTei.;i'lED I Aft I i5 }
I 1 AFF IL ?r--'rl{r -.J EFTiAn"Z8..j .' ji X'.,t:
- F
cHs I fti-l*ti L+ii.ir! ci:=." _
lli-lA lfiil4N r'Til . I-,,r--jg n: ; :, rai' 1l-i tv tE regulate

elEctf-*nir !a;rrr3;.1!;:;::,'::. . " ,l!.,=., i:; i:i.:.i-!.
FEF. IFFN:, i --i-:r._: +=: ti-j,_.t-== :.i ;riion frng BSP at
5al: + rlrd i t=l- .
iHA!Eii+r.! !:.ti:1t _ i.:.-, r il ii.:.,.t ,.= .,:r:-ri i=h ino narnan ang
l'!=net+r-;.. F=.+i-;-{ ;r.-- :,:rr !., r_i_:=- -t !:-., ='-" J:t=.i i*i-ll act.
l]llA!,tllAiri i-*ij-ql, 3:.:i:;..: ,: ;-,: - j .
f,HA i F'f.Jet'.J Fjlli{.- . I: r:; i - r_: ; ,..:,. I ; ,.-:.r;:-r

" i{ung hindi sila
nagbab,=ar di b=ii=i.: : j_-' i,j..., i rn ra one b0s5
=-.:=. F-f -
,J r trri.Ii S.f. :r.' .- L i.,: -:. : .. r;. ._.,
fiFF " = L..'ii.:;;.. -; r:7.r "

I-!trREi,lC
CHAIRI"!Ai'.J L4UFEL" N= ;-,r-r-i=i..
iHAIEIiAN . ttl" i"i:1=nE i: Li +l=l: -. .-r r::,;: i_:._c, ah-

f,HAIRtlAl{ LA:JREL, *;i; Firif ..:ir=;=n j:;. iyong sLlsuntrd.
Bk:;; 61n iynng 5t-lsl'inr_rJ -
REF. ilgRENg. S:-gliro ar,g ana diir. i'ir. Chairman r iyong

sa IPR baka riayroang ftga conf iCEnt:aIit,l. 3yon anE reason.
T ..
cHA I RHAr't, R6&O'3ffi F.baan r
REF . f,t0RENgi.t'li;1sai,i{Fege l:J =a m* tr i :: = Iycn ang reagE n
ng peq-file ditf} sa flcuse varErln,
CHA I RI4AN AOCfl , Selti::n ?i?
EEP. T.IORENO, Go, b:-.ka c;y lriE; iF F.'. mga copyright...
CHA I RHAI.I FOC-I] . *n':.'tie;;. il i=jerEd
::,.. by the
cclrnmerce I aFr., pupunta
=a Ln;"-fr i E f-r-: t =i:a" 50, e-co,nJEel.Ee
fitr
'rgg
n* =f,
L---i.-
T.JG
!-' :
iiii'i:li':l rr"f:': ii;r-l-rr. i'-::::=-
BTCAUERAL CONFERENCE ON TTIE GENERAL BANKTNG ACT
(Comnittee on Banks and Financial fnternediaries)
April 11, 2000/Ieony/XXVII-1
CHAfRUAN ROCO. {Continuing) . -. Seetion Bg niyo is

the sane as 58 except that may colatilla kani. Tanggalin
na natin, okay. Parehong pareho na iyan.
CIIAfRMAN LAUREL. Okav.
CHAfRMAN ROCO. Tangga] na iyonq speciaf inquiries.

Pubfication of Financial State ents.
CHAIRI{AN LAUREL. Covere(l na kasi ito dati, di ba?
There was a previous section that. covers this. Okay ito.
Nothing is wrongr with this, iderrt_ica1 n;rnan.
CHAIRITIAN ROCO - Okay i to . I l.o i yoljq ano. ito iyong sa
Stockhofders, ito iyong twb pert:errt sa 59.4. Dito tayo

nag stalling. ,, ". . .bank exposilr{) i,o rl i1.s"go.s, officers
or stockholder of moue l_han tvo ltercent,', Saan ba
napupunta iyong two per.(:ent na iyrxr? Ah, pero tinanggal na
natin lyon.
CHAIR.I{AN LAUREL . Actua,I ly . t_h i s requirement is an eye
opener for the CentraL Bank so that they will know uhich
areas of the bank.
CHATRHAN ROCO. Yeah. yeah.

CHATR"}IAN I,AUREL. The Central Bank will still not knon
Lrho these people r.rho are DOSRf just because they have less
than 50 percent .
CHATRUAN ROCO. Kung i-accept nanan natin ito hindi
I3
BICAMERAL CONFERENCE ON THE GENERAL BANKING
ACT
(Conmittee on Banks and Financia.l Tntermediaries)
April 11, 2000/1eony/XXVIL-2
naman puwede i.to, 'no.

LAUREI,. .['ran spare rrey
CHAIRI*IAN . Mahihirapan naghanap
si Mr. Galvan.
CIIAIRMAN ROCO- tio how do r./(_, to()t..? Somehow, how do we
massage this Qi tJ. at alI because t.ransparency. . . puwede,

puwede ito.
REP. MORENO. Aggregate.
CHAfRHAN ROCO. O, baka puwede iyon. l1aganclangr ideya

iyan. Baka ,,aggregate bank. , .
CHAIRMAN LAUREL. Iyon na larrg. i.yon na lang ang i_
insert, "agrgreqate bank" -
CHAIRI|AN ROCO_ Let ne ask you an innocent question.
ftong two percent na ito sa mqa listed sa nga tax, sould
this still affect the.,.
REp. MoRENo. Ito sa kanya. I,fi supplyinq... what
they're saying here is if the borrowing corporation
or
single individual owns nore than two percent
of the
stock...but the tvo percent ru-le does not app]y
to the
borrowing corporation, Then if the borroriinq
corporation
.ts owned or controfled by the
direcr:or, officer,
stockholders, then it is considered as
a related interest.
Hindi refevant itong tr.ro percent sa borrowing
corporation
dahif he nay own less than [r./o per.(:en t personally but if
he , (
ea lf
'',,,t .
BTCA}IERAL CONFERENCE ON
THE GENERAL BANK]NG ACT
(Committee on Banks and
Financial f n t_e-rmeAiaries )
April 11. ZOO0 l]eony/XXvfI_J
owns twenty percent or rnore of the boryowing corporation

DOSRfna iyan. So it will- renove the facilitv
fron a DOSRI
corporation.
CHAIRMAN ROCO. Ano bang provision ito? Bago ano?
Perciva1, itonq enuneration na
ito bagong provision?
MR, FLoREs. yes, sir, (Long silerrcel
CHAfRMAN ROCO. trle retain the otd position na 1ang,
Mr. Chairnan.
CHAfRMAN LAUREL. yes, s ir.
CHAfRMAN ROCO. Siguro because these
are... ve just
reject it nufa nqayon. we just
conply-
(DS ROWENA r. PI]NEYRA TOOK OVER )

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matanqqalan rlt;rr.:l !:l,T;rf: !-rti=iri:iir-': +.1._i r-!-?.!cln. Einibigay na
n3tirl
=3 i.ani.le-" !:jirrt: t =rrj,-!r.r, r t-
=nGLlld be ns bettElr Er
no worsi ihan i-:cr* iit=r rev,li.= J ,,r rsnsFs ftrr FhiliFpinp
banLE. i',rrnq e*ir, F.rE,a:i*:rf1 nr i.:ri-ri: r=;-in ang licenge doan.
Because ctherwr =e ry= Ev .l i irg y-;-: .i r :=o and tl*" can crxn
hllndred. And ttl ti!,r- jEii tarstfi1 i i: = lii=-rir:_mc,u=...
CFTAI FI.'AN LAUftEt I'idi rr hi l=aplr!1"
CHA I Fl"lAN ftG[]U. FEFaa.ro n-rreF n:i=a placardg.

CHAIEI{AN LAUHEL. f,ctlrei ly. sjrc anq rnenrber:, ng kuHanr
ng HBnetary ftoard.
CHAI Fi to ba'l
trHAI EI{AN rlrAlfREtiir&rr Di ba:,
CHAIRFAN ROCO. Litna i ana . d.r br ,,
FEF. HORET'J|}. Frto,

CHAIRHAN F0CG. FiiB ba?
CHAIRi"IAI'l |-.AUEEL..
FitE. tsr ti"r -F_.,. i_a.
CHAIRHAN ROf,{]. yeah. Fers pErins ]*alang rason
kung
af f i-rmative vate- i{hat rio we H3nt tt] ri}ake i.t rrstrictive
sa hor+ te revoke. di baT They
=heulci tre treated exatrtly
the sa.ne way as any Fi I i Fi R b*nii,
REp - l"iilFEFJti eur, irii !ir:r i I ),ong reasc'ns Bre
"
j stitiEtbtE.
f,t{A IEI.IAI,J l_ALiF:El . Lii,:ctr. Ea!_,:i=r ilr
EEP. I'l{]EENr-i. Jri=E:i.irFjrit,
a
E1CAf,ILE'IL CtIItiFEFF]'i[:E Lil.l l+lF GElllEli+i. FiiNl..INE Af,T
I r EE Uht tsANf..S At'tti r t I'iAhtc I FIL thii-F.|EDIARIES)
i cot'fi.iI
TI AFFIL zOU{-} ! EFT IAttzfih,i .' r-xIX - 2
IHA lRr,tAH ROCO. Faraftq m3=yado neman si I ang
nakakalernang.
REF. FlOREa,ttr.it4,,:iDqpat nga i tE. "=hrl i revcke, "
CHAIRI"IAN LAUREL _ Eharter hrndi chapter. Char ter
"
srgure i to.
trHA I litlAltl ftOC|J. Anq
3li.n. =a SEct1Dn,,
[:HAIRFIAI{ L*IUREL. Eecti*n 4; _ tiol!=g.
EilCil. xi*ta rra diLr. eh= ir=.

CHAIfti'lAl'i
REF. l"lORENtr. f,hapter. chapieF tstaga,
CHAIFIIAhI RDtrtr- Lrjala na iio. ha;l
CHAIRI.IAN LAUREL. Fariial ty id,nEicaI _
CHAIFFIAN REUO. I t-E n3 la.,q,
CHfI I RPIAFI t.f,LjRE, _ _ hitrnd: t !. nd nefllan itco

L! iyonq
dt-ltiEE Bnd resFf.,nslb!.!itip= nB d l..r Er rurc_. langgaIin na rin
natin ita.
f HA I ftt'lAlrt Fi,ti-r.t i i _, _ :r:er r l tcn . rirranq section?
LHAIEI{AN iF.tjFEj hE._ rIc,t! 5" i i.-! |ic{-rEE.
ftEF . ilAREiJi.l . il ; nd r. . A*n r i-r:,'
CHAlEtrlAt'i l,.ilL lFi:! ilrrr!F &i,
fiEF. f'lflFiij.rij. i l:.;, i:rri=i r==er= t ls. e. Puredeng i-
Hort=e versjrn ne = jc,r" c.
RD{]O- rlnd r.re edit ]c nrrFr r anor ,,engagE in
CHAIRf,IAH
trust business srrbiect,, r.r*Ia nn ,,brht-ch

shall be...,,
"Strbject ta the proviaians .'f thr=
.:iiapteF and rures
prornulgated by the i,lonetary Eoelrd-,,
trtay- Sc'. i_edit na
qT4
14e
Ftt i-*i'iEFilii i,.ilhlFi:Lrt.l,:i.f rii,! ; i..;r. ,.i!ii,li- r-:i.i f,j
.ii.:,, I l,.lLi A{]T
i i:i-il'li'il iilts : j!,i rj!:i,ii : .i;iir.i {jr ii.tFrf,ji irir i,,i i:F;rl!:DIARIES}
iJ ilF,E_Il, ;rr.rrr,i . 1_l.i l!._il.:l !rr,,i r,'l t.!, _ 3
1*ng n=trr;,
aHfl I Fl'lAl..i LAi_JFi*.t_. . Ll i. i _r c,1!_! Llsi tir=t.:'
CHA I Ft.IAi',t fttrEii. ,'rdir i: i-r Ehiil tie,,..', Tangoal lang -
It = lrere ecir.tlnq. ,'t o rnc:ae l.r irr!=L hll=inegs subjeEt
to
the prcvi =irlr!e of iht
= cl.iapter ;nr,! r'i.i j p= trrt}ftu I gated by the
flonetiry Eaard, ,, ly=l .
FEP. I"ItrRENO. 11r " i:hai rnran .
EHAI RHAI'I RBEg. Yes. yFS,
REF . FIORENO. Baka plr|.|ede LyEntr SEnite version dahil
mas kumpl etB.
CHA I RI,IAhI ROCT}. Saan i-oan?
REF. PIOftENO- It{r-
f,HAIRI"IAhI FSCA. BnIT a stocl:htrldEr cir_i ly authorized ts
engage. " Ana i t(]ng "beh{]of cf cther-st', UEpd benefits...
"Behal f" siguro -
REP. ITERENB _ Hindi" tuind.i. _tt{r. j-to talaga.
CHAIFI,IAN ROCU, Senate, Senaie versic:n.
' HoREt*o ' A) thcrigh snq H,,u=e v.rs..n
REP
l imits to a
coFF.]ration henFi a!- tn,JeE tinent hgLt=e ,
CHA ! fit'lAl,J f;lllcir, i:i= i..:r br*:dEr_ lrriq i tc.
REF. fiqFFl"il-l. 8rr:ader tyilna SEnFte,
CHA EI'IAI.,J FIii]Li rJ!-aader .
T
" ir: " isr:at: vergion na taytr.
7'J ha. Conduct of ;1,1o L;Fn.l-rc r-r,:i !-t r_r j *qeneral na natin
" _
be'cat.tse ar! j/ar;l,. r r..t-,= r J .-r{erE|l ir\i len*ral

= laH6. He?
fiF:ay. DLttie= end r-eprcrr=rbj l t i_,r *=
!.:!nns ne tayo diyen.
B I [Af.'E&AL COIUFEIiENT]E ON 'rHE GENEEAL gAi,IF.I
NE ACT
rc{rFtlrrrEE or-r FANr.s AND Frr,rANcrp. iruienn EprAR
11 AFFI L :OitrJ r. EFT Irql,lztrtt , -.r: X rEs
_ ) t X 4
f te nr lariq. partnei-" iyr:nq t::2", " Atr, hanapin ni./o na

i,..rar-r. llaqay na ncrttn 1ttrn,-.l [j,ar=trraph B. Section B of
5F... l'hat js rtii=r=tent t;itfmut r *qrrr,rrnq all these pDIC
j.nclirsjons hec*ri=n lfi,+i = tire cL:r:i I ct prsvisions-
-r f yan
enq trir.iafraEt iafi n: Frr li-. i_r. trJl ! lii5 ! fr _-Jinks |.,hat tc, do_
Since pre h.r.Je, !-E,r.|lrr.,..il ;r, i rei*;-r_.:rc== pDIC,
=", that l{iI I
settle rll ar-clrrrrrr=ri i = .,aptr+L=e,n F.ienai:ci re':rtt-iil.
[:HA I E!"iAf{ Fi!_;{-:ii. i-ir.=.r. n._, r"1i f i; ,;r.;,.

FEF- l"i0frEfJl.,= {rilril
=: i!r-r:r:r,i :i l =t;tapftE,nt5_
IiHAI Rt'i*It l-AljtsE:i j t_,.ii*a **t;l:1.:+n
natin_ l"luk hang
tapo= rre 1+h; t r In . p,,
llHAIRf,tAN FilLti. ,-ir-oe' rrrc, r_o.rir ui
REF- i.lff,-lEltlr _ F Lr*,jei:Je -tronq r i]_f!qncral. Eta temen ts
st.rbmitted for- taijet!on f_alt!.F(1seE tL_ the FJR_
CHAIRFIAN llOf,O. i. to. it, Iir=rlii: aagr r.yBng financial
statements. Ent
" FJhlrh fie'; ji-rrir_lde" hindi ba?
anyt+a,.r
RF, fiAFEFIO. ilo, pertr m&rj i:.Lrr,iin

l.asi iyan , eh.
Talagang we arE...
o requ r re .
L{h;r f It rr--r
tilhat .-_ Eay
!.rent io __. 1B
the larr rhould
CHAIRI"IAN RBg0',l1iLrritr,f :Iyen na iyong hinihingi

ni Jokor.
sige na. sige na.,,..;,lr lyot*ji;neflran . . .
REF_ |IAREND.
fyong ano?
IIHAIRHAH EOCU, I tag*y
n ;,r n: t y:l.-i rn the repeal
ing
cl6usr. hahanapin r to.
f!it1.4. repe*I ina clause_
Fertrival r brit keep thi.s
Ito.
f sr yol.rr=F ! i. Ll; can f del j.vBr a
BIf,AI"IERAL CIINFERENGE, nN THE GEI{ERAL EAFild.rHE AtrT
( CO}4},I I TTEE ON
SANITS;i.AND F rruAftt] I AL i i{ IERI.IED I AR IEs }
11 APRIL ?il00 ,/ . EPTIAHZ0N .r y.tarx - i
ggonsot-saliF sl]eech?
{]HA I Ff,IAT,I LAUREL , Sigl.rrtJ ialiti<n na natin iyong

babal il:an natin -
CHA I hFIAFi Rof,iJ. *nB Pe 3nq b:&e I t i,:=fl n*tin?

REF" HtrFENtr- I yons anc, Di ha $av csttrFro,fiise version
na hB tayt] r(]t]n?
trHAIRHAN LA{JREL. iaan?
CHAIRIIAN ROC$. Ano ba. arro bsne batlalikan natin?
l'lF. FLOEES. I vorrq e a ta:: ref rrrr: , r
f,HAlRPlAt\t litlfl0 " t.i,:r. jrrjn n|:l_ Qnr.r+=t, hinihingi na,

REP - ,
An*rc ==rt i sn i .vc: i
nnFEl{Ll
CHA I RlvlAtJ RUCI_I, r,1rrnq E:: t:r., l Etrrrr.=,)
I'lR. Ft flFES . rihi,
CHAIRl'lAt'l litlil0 " ri,r.riiir_1qr .11 ,-iTr,:=:-,
REF . l'l0REllt -
riri.rflc =e.tJ.nn r..,nr-t ,
f,!8. FL_LIFF,S " Sr::cti.._rn .-r.ri. dr !r? r.rnrch may include

f inanci*l EtFtementE Fl.th.nlitrd foi iJ.,t=tlijn...
EEF. PIUREi{ , l.r} l.l j,.-,S j, Ari,rr-ri n !-,.: natin na talegang

requlretrlerliE iyan _
CHA I FI,IAN FOtrO . L,rhi ch -fra.t I in{:lLi.iE. Perc| rnaB ,nahirap

iyan.
REF- I'IDFEI,IA - A partisl iEfia d rl cm its.
CHAIRFIAN ROCE -
REF. I'IFRENA, inIlLlriiri,f ih* correEipond ing

finenf,il statementE elrtimi tted fsr ta:rat i sn purFos5,
dffi
/'
ili.l I tlF $Ll'iEFaii Frf+f.lt::ING ACT
E I C*t-tERAi. r.ttit lFF, F.;Elr!l E
TTEF {_}i'i S+titi.:i ,r!l\llr F i i''lAtii-l I i+i- i I'i ! ERi'tED I AR IES i
{ []Dl.tFtI
i1 AFF:Ji- 3t-ii-r,.: .:' EF I J ill'lii-rf.l . x.l: IX _ 6
LiJA I lir'lAl'l illl!-{_1. r:!rra-in prgF I rin:rnq paqe?

FEF. l'lLlfiFl.'r r- lrc# r..
{]ltA{Fitlili.l r.ilitf;iF: " i-l * l i t:=rri !.ii :=,-r; natin lyan para
fliaI j Ranag.
FiEF. i'iilFitrilil- iiiiIi.:ti':,r rr. r'.: r, i.. I !i-tr p|.lplrt4eds - Let ' s
rFarj the 1j!:]r.:sr--
's.r sr r:r., ll: . I h.!r j.ir,rr:. l. *r* Eurwede.
[]HA IEPIAI',J ir:i-i{l-- " {-!-.
fiEF. I'titFFt'iL{. ,, I.:r-.r:}-Lr= t: ri

= r.nri i act=
.: and demand r
etcrtera. .."" *nil th=r _1f ai!- trre ,.,:ui-* r:revenue.,' iEingit
natin. ";nd =li:h j.n is;-mai j. or.-, ra=, it:j.,, i;e prescribed by la}. Br
by ri-rleq and rpgri_iF-i.ron= ct tlre i,i,.:+=i:ar.,, Ft:ard tr: enable
the bank io r:rsgerl:, e,.,=i,-rai= l-ii 11.-1;r..i l- spplicati.'n_,, fn
othrr }|t}rd=, th t j r;aficiF! 5tatflrellt EL!brrli tted f or taxation
Furposes is a -tsqliLrement |4hich ttrE -idr{ mandBt5. Al I
other subrnissiens $r] I I bE as may be deterlrined,
F:S f,HA Iftf{Ail ROCO. I,lc
" no. '.Anr} ELr.il information.,, we
will ettach to this inquiry, Sa. r+e biill read the House
version aE isr the first Jf,d sdd on. . .
=entpnre
REF. I{OREN0. Af ter ,,r-evenLre.,,
CHAI Fl'lAN ROf,tr . After " I r:en itrol icat j.on. !! Siguro
tanggalin na natirr. ',basis ft}r I$an FEnlicati{Jnr,'
di ba?
REF- HDFENO. Os.
CHAIR]9AN RGCA. Af ter- " revenrrs . ,'
FEP. ttoFEhto. "And
=uch l.- f crmitisn aB Jnay be
Frestrribed bt Ia* er ily t=Lrle=, etce**rr; - ,' And
then idagdag
7s
F ILAF'ER*L [;TII.J.Fi: GET+l-:F. iil'.! liiE r--I: JiiEfjii.ll ii!:ittli..IItG ACT
{CilFlf'lI IIEE Llru Fi.il'iiiE ,iniO F i iliei.it-, i:+i, i:':iEiitlEtIAftIES)
l1 APRIL:r:)r-ir-! E Fr f ! Ai-lZt.ii r .' xlIX - 7
tn[f I i;tlrrg-.,
REF, FltrRElilti. 5err3nrJ sEntenE= -
CHAIEI'IAN ROClf_ Hindi ,nalrat'tsla i:,flne ,,in formlrlatinq.,.

REF, l{uRENO . ye= , ilo.
CHAIRI{AN Rtrf,O,
=htri-rlil =Lrch statempnt.
etcetere. . . !' Okay ,ne. Bld law iysn - ln farmulating rules
that should go in. Dthert+ise, ins*ewalan taycr rlg !-sang
tnirrBf inBnce. trkai,,. Ano pa?
REF- I'lflRENG. Ito- Ilron n: l=nq iy.cnq ceilings.
CHAIFPIAAT LAUREL. l:rons f anily
'rr,r.lerghiF.
inctrrpora tcrs .
CHAIRI,IAN RtrCC, Saan b* iyan? 5aan hs. iyan?
REF. MOEEf{U. Fage 1? sa ,r,atrr:i.
CHA I Rt"lAN fitrCO
" Ef, ma t r i ,{ . cD .
REP, HORFNA - Sa Senate .,,ersior! i,= f Lrl I disclc=ure

lanq"
CHA I RHAru F]OILI " F*=ncr. at;t=.r,: I *nong gusto Ino?
Secticn 14.
REF. PiLTFE,TIO. {e:,ih r:aq= ii= ;r:f_r_
ROID- iiErl-ir,n i-t,

CHA I Ftf'lAf.J
=$ ;iI:Lnr Fanoon ba?
REF, f-ltrFEFJll. I.r. ftitq
=,r i.{it.i== i:.i._=r ill anq I irnit netin
is ?{:} percFnt. ftj nci i tja I i*: F:trir:.j,
flHAIftt{AF, F:[llO
" :+..reri t.i i=l*1;1 11..;:n,
REF. flnRErun, fr.:*41.n - 1i.lr rr*1jr_ri:. And theh corporate
stEckh6ldinq=.. 6ij i!pF(=rr i: iirn:.t= i,iE rp . in f act,
t.*t !Ef;A! lrtf.lFFr-.:E l\t1:t, l-]t i 'fi ,5 Gl !'!i ['irt ]:1irli!;r. ! f itr ACT
ts l.
i []ijl'ltl I i t EE Lili' EfiNr.g iiltll; t i FjAi,lij I i.t|- ii.!t EF:i'li-D I *lR I ES l
J. 1 flFF I L- :i-)r.i'.i .l EF' f IAHiLTII! .. :. i; IX - A
l.:.ilrr3l i:inq i:hs rr.r(r11!-atE =i-lcl l:l-,id1.r,_t= irEm :lr-r t63 6{r.
CHAIFif.lAll ROIO. lilc. LtLrt r,r!-iat if-a: ..:,"BLr craftinq?
,qiEF . FlllFli'il . i'lE i:*n =dI]ct {-ia i,i|]lise ,rprsion?

CHA: Rl-,i+f'l iliuii " Ssr l- r r:;r ; .l 4 ,'
F;EF . ilr_ltilj4lr. tr,:i. i ,."| =irri i a,. iir ii inen as anci l l ary
Flr.:rvl9.1t]rt=" " .
iUS !.i:iii.i I'aF! E. ii.ti,.i.llill; !fi-ii i?:iL';,, i
i:i.:;t
BICAMERAT CONFERENCE ON THE GENERAI, BANKING
ACT
(conmittee on Banks and Financial Internediaries)
April 11, 2OO0/Ieony/XXX-I
REP. MoRENo. (continui.rs) ... provisions in 16.--

CHAIRMAN ROCO. If ree adopt this we stick that to 20
percent.
REp. MORENO. yeah to pub_lic ru_les unl-ess, unless they
avail of the benefits given to foreign banks for as long as
they are eliqrible under the Foreig. Bank r,iberafization
-
CHATRUAN ROC0- But that is exactly what rn saying.

The reasonI rlon't want Lo have thjs des<:ription aqain is
because you rrirr hav.r now a spo{:i a I r-u.re for fanifies
whereas I have is altitude nit 40 non_bank and

ttr
individual s. that aprllies to forc i<rl . t_hat applies to

Filipillos,- 60 banl( j_ng r:or.poratiorr. that applies to
foreigner, tha! applies t.o Filipjnos, rrothing more. If we
describe this will become the rulinry prov.ision for
fani-lies. rn vhich case again Filipino fanily can or4rn
twenty but an idiot farnily somewhere in Bugtong can
only
own 40. Ayaw ko noon. That,s why we
will now report in
our report, Mr. Chairman, that when applying the
rules
eguaffy to Filipinos and foreiners, a
non_bank or an
individual is foreigner can own up Lo 40 percent.
who
That
applies to Filipinos. A banking corporation
can oun up to
60 percent. That applies to foreign and Filipinos.
Period. No oore quiao_guiao. Okay,
Oh, we just elose
BICN,IERAL CONFERENCE ON THE GENERAT BANKING ACT
(Comnittee on Banks and Financial Internediaries)
Aprif 11, 2OOO / Ieony /XXX-2
f ast detai-ls -
CIIAIRMAN IJAUREL. Mr. Chairnan, kagaya ng sinasabi ko

sa inyo 7 inportant issues. Tapos na tayo sa ownership.
wj.ndow tapos na. control iyong sinasabi mo.
CHAIRMAN ROCO. l{ala na, uala na, tapos na iyon.

REP. MORENO, ff we were to adopt t-he Senate version
now, we'1f have to-., silent kasi on that 40 percent
agreenent. There j.s a liilitatj.on as far as foreign
stockholdings, individu;rl or non-bank. Now. what we can do
is i-revise atin iyong S(,etion j1 an<l Seol.ion 12 sa Senate
version. Ang ljmited itonq 40 percent_.
CIIAfRMAN LAUREL. pale-pareho.
REP. MORENO. . pare-pareho.

n CHAIRMAN IAUREL. Ako f don,t want Lo take any
position, Mr. Chairnan, kasi kayo angr bahala diyan.
CHAIRMAN ROCO. Oo, sige. sige,
REP- MORENO. Otherwise, walang limit. eh. f don,t
nean that is the intention. Sa akifl kunq iyon ang
intention, then by al] neans, okay ako.
cHAIRtt{AN ROCO. Why don,t rde put it in Section 14,..
17. Ito sa Section 10, ,,Foreign individuaJ.s and non_bank
corporations nay or.rn up to forty percent (40%l
." This rule
6haLl apply to banking corporations or to
farnily, Filipino
,r^[
i,:, .l
BICA}IERAI CONFERENCE ON TTIE GENERAL BANKING

ACT
(Conmittee on Banks and Financial Intermediaries)
April 11. 2000/1eony/Xxx-3
fanily groups and non-bank corporation.

REp. MORENO. r'amily groups and non_bank corporation.
CHAIRMAN ROCO. O, puwede iyon oecause pas bindi

puwede ang foreign indlviduar can enjoy this and not ne.
Mas sinple,
REP. MORENO. Unif orrn -
CHAIRMAN Roco. Uni form, oo- In 71 we afready have a

provision, di ba? Dito n;rnan sa 71 nakalagay na rin diyan
iyong 1oca1 corporations. so puwede na iyon? So we can
buy 40 percent eaeh of Bpl ,
CHAIRMAN LATJREL " J.y<'ng t:on Lt.o.l t_aDor.- nu .
CHAIRMAN Roco. oo.

CHAIRMAN LAUREL. ft-onq equit.y.
fi CHATRMAN ROCO. 40 n6 1'o",r, 4O rla .
CIIAIRMAN LAUREL. Stockholder-.

CIIAfRMAN ROCO. Anong stockho tder.?
C}IAIRMAN LAUREL. section 35.
CHAIRMAN ROCO. Sifent na fanq tayo doorr.
CHATRMAN LAUREL. Sifent. okay, drop.
REP. MORENO. Si-Ient na tayo doon.
CIIATRMAN LAUREL. Iyong foreclosure ng nortgage .

REP- MORENO. l{e adopted ng Senate.
C}IATRU]IN LAUREL. Okay, Senate, fyong Section 91,
BICMBRAL CONFERENCE ON THE GENERAL
BANKTNG ACT
(connittee on Banks and Financial Internediaries)
April 1L, 2OOO / Leony /xXX_ 4
page 42- ftongr risk monitoringr

out na lto.
CHAIRI{AN ROCO. Ah, r.,ala na.
CHAfRMAN LAUREL. Okay, tapos.
clIArRr{AIv Roco, okay. All problems has been... PDIC
r.re re jected. Okay. Ohay, Sandali.
Sanda]i, what wilL you guys do? Sa Senate
na tayo
nagtrabaho, it's closer. Sa Senate
na tayo magtrabaho.
Pagkatapos, paano ang pir:mahan naLin bukas?
CIIATRMAN LAUREL. whar goes first. the approval of the

adoption of the bi camt
CHAfRMAN ROCO_ Or shall we c()rrvene the bican sa
Senate ng 1.Z.OO . rnrorn l.l:00, rde w iJ -1 target 11:00 tO be
ready. If we convene nqayon the bi<-,am at 11:00. they cone,
t6hey sign. Ang lrna dapat tayonq dal.awa re_revieu_in
natin
by 10:00 o'cf oek tomor..row. Re_rev i.ew_ rn natin pagkatapos
they can siqn, they can cone and go.
CIIAfRMAN LAUREL. So where do we neet then?
CIIAfRMAN ROCO- Sa Senate na.
REp- MORENO. fyon bang provisiot r;a savings and loan
association andoon pa rin ba? pero
sd General- Banking Act
kasi are we deleting it? ?he reason
kasi r.rhy f,m asking
this because iyong sa HfcC.
CIIAfRUAN ROCO. Tinqrna! na Lanq natin diyan. gecauae
15
BICAMERAT CONFEREIVCE ON THE GENERAL
BANKTNG ACT
(Committee on Banks and Financiaf fnternediaries)
April 11 , 2000/1eony/xXX-5
sa Savings and. .,I_.ioan urrAssociation benef it are covered by

General Bankinq law. And they prefer it that way because
ang dani nilang privileqes doon.
okay. I.lle adj ourn,
AD'JOURNMENT: 5:43 p.M.
-{tr-..
WE HEREBY CERTIFY TO THE CORRECTNESS
OF TTIE FOREGOTNG
TO THE BEST OF
LEO
l.-'
e4r{t,*"[.r __-
"<-)
- lnul p. rr@Jon
(A1I Sen j or Leg.i sJ.at-r.rre llin!r1- e s 0ffjcer ff)
'\
CJAguilar - 2 Ap,r,i J. 28 . I tlFl 4:55 p.n.
,v At this junctur,:. Mir. Speaker. may I move that we

temporarily susFr:l1.I c,:,nsi delat 'r.rn ,t t t;ir j s; heasure eo we may
ta.lre up the $p-,6y1s61,slr ip nf ct.lrer:, rrreasjrir.es. I so move, Mr.
Spealrer'-
THE DEPUTY SFEAKER (Rep. Gull.asl. Is there any

olr.iectian to the nnti,.)n,? r lii /a3p,--i- r 'l'lrl tlhair hears none;
the mo blon i.s approvecl -
CONSIDERAT]ON CF H.E. NO- 6814 ON SECOND READING

PERIOl] OF SPONSORSHIP AND DEBATE
REF. ROXAS. Mn. Speaher, may I move that we now begln
c]onsideration of House Bitl No. 6814 contained in Committee
Reporb No. 206 subrnitted by the Committee on Banks and
Financial Intermediaries " Forthis purpose, Mr Speaker
" ,.
may I ask that, the Secretary General be directed to
read the
title of the measure and only the title a6 contents thereof
have afready been diatrlbuted to the Members. I eo nove,
Mr. Speaker.
THE DEPUTY SPEAKER (Rep. Gullas). Is there any
objection tr: the motion? (tijJence) The Chair heare none;
the rnotlon ie approved. The Secretary General le
dbected
o to read tlre title only of House BiLl No, 6g14 contalned.
1n
Committee Report No. 206.
THE SECRETARy GENERAL- House 8111"
Nc,. 6814, ent 1t 1ed :
-.AN ACT PROVIDING
FOR THE REGULATION n F' .FIJrr
ORGANIZATION AND OPERATION OF BANKS. OUASI_BANKS, TRUST

ENTITIES. AND FOR OTHER PURPOSES--
,r\'"
4C.rl{.J
r'\
CJAgui 1.ar April 28, I999 4:55 p.n.
REP. ROXAS- Mr. Speaker. mav J ask that we

now
recognize the distlngulshed chairrnan of the commlttee
on
Banks and Flnanclal fntermediaries, the Honor:ab.Le
Maeerlo
Lattrel IV, so he nray now begln sponsorship of the
mee,ure _
f so move, Hr. Speaker.

THE DBpUTy SPEAKER (Rep. Gutlas). Is there no
objection to the notion? ( Silence) The Chair. heare
none:
the motion is approved. The chair now is vepy pleased
to
acknowledge our very hardworking: chai'peron
of, the
Commlttee on Banks and F.inancia.l fntermedlarie6,
the
distinguished Gentfeman from the Third District of Batangaa,
the Honorabfe Macanj,o Laurel TV, to deliver hls opongorghftj
o speech .
SPONSORSH]P SPEECH OF REP. LAUREL

. LAUH.L;L -
r(tsf Thank you , Mr . Speaker . Our di e-
tinguished colleagues from the bi6lger Chamber, thank you
for
this opportun-i ty,
Mr. S!-,eal<er., Lranks and other f lnanciaL lnstitutions
pLay a pivotal rr:le irr providing an envlronment
conduclve to
the contlnuous develor:ment of the phj.1.ipp1ne
economy. Wlth
this significant rol.e Flatred by the banks. 1t
iB the duty of
the state to pr"omote anrl rnaintain a competltlve,
dynamlc
bankfng and finarrcj.a1. systen Lhat s ,.i, responslve to the
demands of gl oba I izat,i.6y1 611d a gr6wing
economy.
tnternatignal banking systems worldwide
have been
undergoing restructurting and consolidation
ln recent year6
il/t'
0ililg0
c,\ )
CJAgulIar - Z ApriI 28, 1999 4:55 p.m.
in reeponse to severaf important factors. These factors

which have lncreased competltion in traditlonal banklng
areaa and opened up many new opportunities for expantslon
include the globalization of capital marketg, the global
search for flnancing at competitive Lerne. and hlgher. yielde
on investnents -
The globalizatic)i.i of the risk nranagement buerlndss and

its centrallzat.lon r,:i i;h-in firrancial. -. ./cia
0nitPl
4,1
Ansula - 2 Apr.28, 1999 5:00 p.m.
{po - DEPUtvSPnAT{EF GrrL},As)
REP. I,A,UREL. ...and irs nentralieation witlrin fiaanciat

congiometates,. changen in the reguratory and *upervieo,ry
aorn ework,
iucluding the liberalization of domestic alrd cross bordet activities,
tecbnological deveroprnents, particularly in information tecbnolory
whicb.
have drasticallv reduced tranaaction costs fi l the puiodr 6f financial
crisie,
Your corunittee beliewes tttat trre legar fra,oe,-ork for the

operationa of barks aacr other finsrxcisl institutionr aecda to
kecp pace
with the fast changiog d.oanegtic and internatio,nal economic
derelopmerrte' Aad for thie reasoa frrere i* a need.,
'ot m*tely to revisi
tlle Geoetal Brilleilg Act or Republic Act $o. JBT, as ametrdcd, but
to
replace itwith enew lm.
Derpite sevef,al q'"r erl.tnr nfs to Repubiic Act No. JB? which was
esacted July ?4, 19,18 or S0. years ago, there remainr a presring
+-j aecesrity fot a new General B6$i{ing Act that will provide addition.l
o eafeguordr for aerr riskr as.d chaleerges and be conrgieteirt

with ttre
ptovisions of receutry passed laws such as Republic Act t{o. ?6sg, the
nes Central Bar:kAct; Republic Act I{o. ?9O6, lbrift Bar&!
Acq Republic
Act No. 7?? l. Bank Liber'lizaiion; and. Republic Act
!fo. ?g5e, tbc Rural
Baakr Act.
Ansula -2 Apr. 28, 1999 5llll p.m.
It has no* become even roore importantwith the c*rteut fiaa,"dsr

hrrueoil ln the regiotr that the ptoposed revised General gantdtg
Act be
adopted to tay tbe groundwork for fa'ster econordc recovfy.
In viery of the sipifrcsnce of ttris measure. msrathorx hsadnss

were coaducted t5r your comrnittee. Approxiaatety e1 tLaa hou_te
of 6
hearings were utilized in tre deliberation of ths measure.
Representatives from the Bangrro sentral ng p[ipfuras and r[: philippine
Deposit Insurance Corporatio,r: gave am ovenriern qf ths firiqririrl
aflrl
ba$ki,'g situation. vienre &om the indurfry asrociatione ruc,h
ar fhe
Bankers Aseociatiou of the pbirippines, tJre chaflrber of lbrift Baflkc a$d
o the Rutal Barrkeis Associatio'" were also aoricited. lrre committee
imrited
reFeeeutatives from the academe, legal commureitier a'd corxnuads as
rvell ar deporitoru' otganizationt,
In the exeduiiwe session iirat lasied aight ard 6a1s-'crf hours,

foreraost corislderation in the per**ar of the lo3 provirioae ,*ra,r thc
protection due to depositots onri crerliiorg^
Mr' speeker, House Bill No. 6g14 seekg to proaote coupetitfucnem
in the bankintrg sector. imptove prudetrtial stsndards and rtrcogthetr

efectivefieee of the Bangko Sentral's eupervi*ion
over banks.
My deat .Lnu.g,r*o, I a*r 1616 that never has a biu beea rubjected
to ro firnfly man houts of rerrienr and c{eliberatior,
Rlrgt firiddt'd by ilc
Bangko sen''al ng pilipinar, a courmigsiorl
of fon;rei,ng f,fotres n as
meated in August Zg, 1995. Ttris was
to teview...l ate
' f ':,litH3
:.1,
.l
t
;,1
llong;itr' I ,\inl i8. 1-t9l 5;0i pm
(P0 - Depuiy Speaker Gullas)

REp. LAUREL. This r,vas to iaviev.; trro existing raw trat governs
J
Ilil
,",
the banking system crirnposed of the Earrkers
Associatron of the
fr
Philippines the chamtrer" of rhrift rtanr<e, and the Rurar Bankers
I:l
t.
Association ot tire F'irilirpir;es, {ire Pfiiri|pine Institute
:r cf Deveropment
ii
il
studies: arrci iire A$srrc1a{isfi .i Barrlr | ,rv,nysr-. of the philippines
lnoorpora ied.
The conlnrssion r,arln r:p with tne iiiral ,lraft in

the prececiing year.
In 1997, the conrrnittee in the "[err{ri corrrJrr.:ss initraied

deribeiations but
,due to lack of material tir-ne, the bill was
not reporied out.
, on beharf of your committee on ganks and Financiat

Intermediaries, we are very preasecr to recommend
approvar of this
urgent measure to the Eieventh congress This is indeed a rare
opportunity and honor The Ereventh congress is privireged to enacl
o this important legislation.
Thank you, Mr. Speaker, and my dear colleagues.
THE DEpUTy SpEAKER (Rep Guilas)

Thank you very
sincerely distinguished chairperson
of the committee on Banks and
Financial Intenneciiaries. the Honorable
Macario Laurel lV.
REP ESCUDERO. Mr. Speaker. ,''{
00tt 24
li i Lt-'l
LEDESMA.l May11,lgeo
.i 4:35 p.m.
.::
THE DEPU* S'EAKFR (Rep. Gutas). r-ikewise, we are

; honored by tre
I
presen@ of our youtti and students.
'.i
.1
CONSIDERATION OF H.B. NO.6814 ON SECOND
.j READhT
I
Continuation
:x
:]
',j
Period of Sponsorship and Debate
'l.]
;1
REP. Ro)fis. At tris juncture, Mr. speaker, may I mwe that rve now
contfiue
our consrderation on second Reading of commlttee
I Report No. 206 0n House Bil 1-lo.
rl
I 6814' submitted bythe committee on Banks and Flnanciar
lx
Intermedlarieo
:1
r.ila
For this purpos, Mr. speaker, may I ask that fro secretary
fl Gqrsd b drrccfied
1
{ to read the title of he measure so yue may proceed
it wih our consrderation tprcd.
Ig
U Iso move, Mr. Speaker.
II
:
THE DEPUW SPEAKER (Rep. Guilas). ls there no obfecton
I b hc modon b
i
it hke up Comml[ee Repoil
I
1
],1o. 206 on House Bltt No. 6814? fsjhnce ) Tt]e Cheir
I hears none; the motion ls approved. The secretary Generar is
dlreciled to read ttre titte
I
I onfy of the measure.
,t
I THE SECRETARY GENEML. House Biil No. 6814, erdfld:

I
"AN ACT
I
I PROVIDING FOR THE REGULATION OF TIIE ORGANIZATION
I A}.ID OFERATIOI.IS
I
{ OF BANKS, QUASI.BANKS ANO TRI'ST ENTITIES".
la
I
{ REP. ROXAS. Mr. Speaker.
N
I
:: THE DEPUW SPEAKER (Rep. Guilas). Distinguishd Mdodty
il lgdsr, fie
i Honorable Mar Roxas.
I
I
REP' R.)fis. Mr, speaker, before we continue our consrdordon
I of t a rubjtct
J
I
I
I
rl
I
I
I
{
I
{
!'
:";
'''. LEDESttilA. 1 May 11, 1999
i
4:35 p.m.
il
!,il distingulshed coileague, in he gt, g0 and 1f congresses, distinguished ffirer of a
dlstinguished son who ls novr presenily seMng in sre
halrs of congress, the r.ronoraHe
j
Lando Fua, wtro ls slUng ln the session hall. (App&ruse)
I
I THE DEPUTY SPEAKER (Rep. Guilas). The chatr is wry presd

to
1
acknowledge our dMnguished ootfeague of the 9s and 106 Gongresees,
ri the
.)
Honorable Orlando Fua.
REP' Ro)Gs. At thrs junctre, Mr. speaker, may I move rffi rw now rccognEe
the distinguished chairman of the committae on Etanks
and Financhl lnHmodhd,
the Honorable carro Laurer so he may continue the sponsorship
dtre masuro.
lso move, Mr. Speaker.
THE OEPUTY SPEMER (Rep. Guttas). ls there any

oblecilon b th mdon?
fsilence) The chair hears none; the motion rs approved. The chalr
rcognia's our
hardworking chairperson of the commifiee on Banks and tntsrmodhds, tfi
Honorable Macafio Laurel M.
REP. RoxAs. Mr. speaker, may I also request the reave of the Ho.s so n,at
the technical stalf may occupy the space provided for them..
,teffi
I
000.i0
fi7frVt
:a|, fa:
1
CJAguilar * 1 M^--
r rqy
rr
r-L, _tvvY 4:40 p.m-
:1
ri
(P0 - Deputy SFeaker Gullas)
BEP.*_XOXAE" i:,rovl.ded for thenr . f eo move, Mr.

Speake n .
THE DEPLITY b-pEAKEii (Fep.,- clrt l ns L "

a* there any
ob.iectiotr to the m(-1t ion1 ( .i-r. I e.ucr: ) I'hr-j (_rtrair heers nonel
the notion is appr:cveri. 'llhe fechnlr-a l. irraf f. nay now occupy
the sealB behind ihe S1:,orrsr-,r...
REp. ROXAS.. FinalLy, Mr, Sp,eaker. r-rur parliamentary
status is that we ar.e i n the per..i,,,l ,.,f SFonsorshlp, irr
Farticular, the per:iod of question Frl.l answer or inter_
pellation. At this juncture, Mr- Speaker,, we wouLd like to
}'ecognize the - -.
SUSFENSION OF SESSION
REP, ROXAS. May f ask for one minlrte sugpeneion, Mr.

Speaker.
THE DEpUTy SPEAKER rRep_ eu11s. 1" Seesion 1s suepended
for one minute.
ft waa 4;4A p.n-
ja -/
/ ,/
,/c
ol
t;
l
Arsula -i May i i, i999 4:15 p.m.
(PO - DEzulV SPEAI{ER GULI"AS}
RESUMPTION OF SESSION
At4:46p.m, tlw sesslon ud_s ,esuffied.

THE DBrulla SPEAKER {Rep. Gullas). Session is resufled.
REP. ROXAS. Mr. Speaker.
T.IIE DEFUtl' SPEAhTR {Rep. Gullasl, Distinguished Majoriry

Lead.es.
REP. ROXAS. We are in the period of i:rterpellation ored I ask that

$re flow fecogrrize tfte disti'guished Gentlerna' &o*r Bilitarr, the
Ilonorable Gerry Espina, who rhall notr begtfl his interpellation of the
distinguished Bponsor, the chairman of the co':aittee ..''., Ern.r|.s a,,d

Finarrcial Intermediaries, the Horrorable lllacario Laurel fif.
THD DEzulY $PEAKER (Rep. Gullas|. Is tfiere any objection to the

motion? ($lience) T1re Chail heara none; the moiion is approved.
The Chair now recogriz* our distinguirhed colleague &om the
lalne District of Bilitan, the Hotroratrle Gerry Esp.i*a. to begin his

interpellation of the -Bponsor.
REp. ESPINA. !r{r, Speeker; i rvouid ii-re to, firut, ask the genetai
que*ticn ae to srhat crefer,te, if anv, of $re preseflt benking ayrtenr ia the
operations of ba'ks, tluali-ba'ks.. tr'gt er.rtities ffe eaused to be
addressed bv tlris rrreasure.
REp. LA,UREL. Mr, Spealer, the gen*ral quertion

is ver5r well
taken. In arrswee to the Genfleman from Biliran, the lanr hae beedr
" QAA;..2
$i,)
rtr
Ansula - 1 May 11,1999 4;45 p,m.
eaacted more flatl 50 years ago. Of course, Ltrrcugh the 3,eare, we

observed sorne defects. pethap* tfre better way for ue to reply to the
Gentlenan &oor Bilirsn ie to indicate that out of around 103 aectiooe,
about 68 b.ave beea rnodified, cbanged., replacecl and some are rniqo,r
chnnges but about a claeeif.cation of lS major changee raay be given, Mr,
Spealer.
REP, ESPINA. Mr. Speaker, wl le this Representation is awre that

generally the lew which Eoverns the barlkinn rystem in the courrtry is
perhap*, ag merrtioned bv the honorable respected Sponeor, a law which
is 5O vears old, during the Batasang pamhansa we passed the

universal. . .
EUSPENSION OF SESSION
THE DEzuTY SPEAHER {Rei:, Gull.as). Seesion ix ruepetrded for oae
mirrute.
It uds 4:49 p.m.
000r3
EonErlin - ! ,,1nt, i1 ;l;ii:, 4:50 pn
(PO Denuly $peaker Guilas)
ll [ $i I i'J i' Ii0 irl iii: tL:r:ii:]!c._iN
At 4.54 p.ft]., ihe ses.sr'on ,//os rc$iirfrijrtt.
It'lE: DF_pU'iY Sp[Af\ER iRep L]uiias) rlessjon is resumed.
1-f';e distinguishe,J corieague, fie r{onura.1i$ flsniria may proceeti.
R[P ESPINA Thankyou fvlr Speahei

As i was saying, in the inteiiin ijatasariq llatnbasa .+ih*re this
f?epresrniaticn and seveiiri others noir nerc in iirii [,ievenlh congress

were oi'lo i\,lernbers iii<e now ccrrcreusrnen iJiri(.i|ina ,,"las a member
of
ihe Inrerirn Baiasangl Fambansa. cariu:i piliillia anri several others, rrye
pa$red ihe universai bir'rkrng law ci r,v-i:icfi this R;preseniation tock a
very aciive peri durinil the riebates r,"r,irri Hs a matier of feci, I
tnti'cidu:ed maio:" amendi'nents lr: iiie l,iniueilai i:*rii,:ing s.,lstem,
i..ii-r:,ti l"h:: Ai-illilt ::;iti::jr-ri:t,:ii,,..itl:t.ii li rr:ii:t;:n: j,i 11;;ij4r eingttritnr:niS
lc tltt i:l'+l; troyt lrjvrli'i1ii':;,: i:ai;ii:: i#!.1,i j r.lrrtijrst th0 hOnOfable
.11)clrscr iIr. gptra,<r:r, il l-r:lllntrt:rie jiti-,i;q.: .1

.1, .j:ii)1:l{)ri.;
rrt portions over
which arni-,rtcirnenls ,,,.i(:i il :nirc,jr-il;r:Li afr[i llr.r,r,r i.rijci-i]oratecl intO this
ot'*1.rosr:d fnea$ure, s;r: lirai \ij(l rrit"r i;i,: iri^,,l*

11 i.:ci the-l rlimetrsion of ihe
tht'tt:;t cf ti^riS preseni propotied i,ilea:il jr# A(
/u
000r,4
',ffi
..ni
i-i.,*
",;+- i nr*.i: i{itiil 4 5tlpfil
Ri-F LhUflHL ii/lr .Spearrer, i sliaii*r hapl:ri to mention ihe 15
major changes or salient features of the hiii
fjrrst. the classification of Lrani<s iras bccn exDanded to inc{ude
universal bani<s islanic banl<s. and cocperi':ti'.le: banks. The fulonetary
Licartl irra$ alsL) qirieli liiii authorjiu .i(.j '.icicimrne such other
classification cf hrtrrriis.
lecmd. l"1r Steai.lei, iirr t;ni;titiiticiil:l i:il:vi:icns on the i-ole of
lhe !,arrqi,ic St:rtlrr:l ir pr-r:.,,irJirrg irllit;',,r!r:',;ir,,ri11 r,, 111 iJjlssilr'rps jp money,
hanitit-r',t en* *redit hi:ve i:..,'i:il iltcu ntrah:r: t;: ii rjr:; irr':rl,i Liili.
'f
;'riri,i. corr:.;is;ti:'rnl' ',.ti1l , tirl; lji,e'1,.rli;.:;r lir.;r: .rl l*r'rirl1 equity oeiiings to
aitiircl l'rror. e f oic:iqn inv*,:$i;tl{:nlr iire t iirliil'rl; r;'.,:rreishiF reqllirement ha$
r;ee:rt t +riucerJ t* [ii]% r:f tr:i:rl ;r;ling l;i'rtl,; il i,;i:.j,:) uf ciisiressed banks.
ilualifieci foreigr: bani<s ate aiio.,.verj io uwn iS0lrir i:i theii.totai voting
stocfi 0roirided iocal irr.resir:r*: i,ifc uiii,t,,iaiiili:ie anrj. accordingly,
farelgners are allcwed to h'ecc;iric hliik Circcti-:i l; ii; lhe exteni of ioreign
equitv ownership in the bank
. [:ourth, the altowaoie corporate e qiriiy ceifing in bank$ is
increased f.orn 30% ta 40e/o o{ the lcial rroiing sic,ck of the bank
0c015
fl
i-:**.,,.ir.. I
,{ -5il r*t
l,; r$,,
',.i! -rl\ P,.({:r:.,'ii;(:r
lt;f; lf ilrt;1,,11',r_r i:i.;.tti: ;ri j.r-: +':r:trnine an enterprise
|l.4 ] ,^
!i rra!r Lr
,,,t...!l
virtl,'11 / (ii iiii:ii,',ljl ,r {)rri'iiij1i i-}i li,r-'iii;,i1i11.j LiV U bank iS ilgly
iTlaullitt0t \i
i.,lilih tc ntlitci lhl: fi;; ii.il i.,i iii,;l,iri:iii.rirr ;tiid cre[:Jitors and lc
pievert;, ultrea$ottailltl ilist;il"rrriioii illI.j ,-1i$:rn;_)ii:_)ri 0{ the a5$ets of the
hank$ and ahu$ed i:'y i:irnli dircc;ii:rs :,rr';ri r.:ifir;1,s. ll.;e fulonetary Boarc
ma.J reguiate the i:ai,'iilrnt i-ry ;erl;"]lr"r i.'iliriis oi (iil|nljCnsa[ion ancj othel
belrefifs tt iheir diiectcrs i,tnd lffir;elL-i iri cr:r"i:rirr !:r;,.iiilptional case$ and
a when ihe circumstances warrant,
Ser,,enth, to minimize th<l risk fronr i:ani<
000r('
BRACIA.I Ivlav ll.1999 4:55 p.m.
(PO-Deputy Speaker Gullas)
REP. LAUREL. ... Seventh. To minimize the risk from bank
exposure, the limitations on loans by a bank to its directors, officrs,
stockholders and their related interests, otherwise known as DosRL under
the original provision the biil was expanded to expressly covor credit
accommodations and guarantees bv a bank to its DosRI, as well as
mvestments of such bank in enterprises owned or controlled by said DosRI.
Eighth. To further minimize ths credit risk faced by banks, improve
therr overall safety and soundness and avoid circumvention of the limit on
bank exposure to a single person or group of courpanies, bank guarantes
and non-loan credit accomnrodations are incl.ded in the limit to the total
bank exposure.
Nirrttr. The aurhorih' of trrriversal banks arrd commerciar banks to
inr,est in allied and lon-allied enterprises lras heerr clarified accordingly.
The lirnit in equitv iurestnr*rts of a universar bank in any one enterprfse
whether allied or'on-allied is increased from l5 to 250,/o of the net worth of

the bank.
Tenth. The Monetary Board is given authority to adopt internationally
accepted standards relating to risk-based capitar requirements

such as the
vassal framework for measuring the bank's capital
adequa cy. T)te Monetary
r/ {, o'oo r. ?
0t$ 55
BRACI,A-I Ivtayi t, tgos 4:55 p.m.
Board is also given the authority to issue rules and unsecured loans and
credil accommodalions.
Eleventh. To strengthen Bangko Sentral's supervision over banks,
clearer and more objective guidelines rver sct and additional penalties for
unsatb and the unso.nd prnctices provided. The Rangko sentral is also
given authority to issue. revoke. suspend or aunul licenses of banks to

engage in banking. T,ikervir,e. the penal provisi,rrrs of Republic Act 7653,
otherwise knorvn as the Ncr.v Centlal Bauk Act are made applicable to
violations of the proposecl lnrv
Twellth. A provision fbr the minimum capitalization of trust entities
is incorporated-
Thirteenth. The deposit for the faithful performance of trust duties is
increased from 250.000 to 500,000 or sucl.r anlouljt that may be fixed bv the
Monetary Board.
Fourteenth. The inclusion of a bond requirement in a borrower's
petition to enjoin real estate mortgage foreclosure proceedings, to discourage
borrowers from resorfing to nuisance claims and dilatory suits.
Finally. the Bangko Sentral's powers over building and loan
associations will be transferred to the Home Insurance and Guarantee
Corporation.
t,/
v " '000:.8
4296fr
IJRACIA-I May I I. 1991) 4:55 p.m.
Those are the highlighfs, Mr. Speaker. ('lerrllt:rnan from Biliran, of the
New General Banking Act.
REP. ESPINA. Mr. Speaker. considering these 15 major thrusts of
the bill, what wouid the honorable Sponsor consider as the two major
. functions of the Central Rank or the Baneko Sentral?
REP. LAUREL. Well. there are trvo major functions of the Central
Banh but we &re now ... I am sorry, Mr. Speaker, I don't know if I heard
the Gentleman from Biliran whether he is mentioning Central Bank or the
General Banking Act.
REP. ESPINA. I am talking about the Central Bank. ...
"0S0rg
rt2i51
CABANOS.2 May 11, 1999 5:00 p.m.
)
.j (PO - Deputy Speaker Gullas)

il
REP. ESPINA. . . . lam hlking abouttre Centrcl Bank.

'i
,l
i REP. LAUREL. Allright.
REP. ESPINA; The two major functions nwv being performed by the
Cenkat Bank in relaUon to rrarious other banks in the country.
REP. LAUREL. Allright, Mr. $peaker.
The Central Bank is responsible for poliry direction in the areas of money,
banking and credit - this is one main function. The other function would be
supervision and regulatory powers overthe banking system.
REP. ESPINA. I ask this question, Mr. Speaker, because there are some
sectorc that proposed that these two major functions of the Central Bank be not
performed by the Central Bank. And that only one of thes should be retained
with the Central Bank, and that another agency may be created for instance to
perform the function of supervision over banks, quasi-banks and other financial
instftutions. I can see from the 15 major thrusts of this measure that it is based on
the traditional tvro major functions of the CB and that the proposed amendrnenb
do not consider the possibility of separating these two major funclions and
creating perhaps anotlier agency to perform one of these major functions. Would
that be a correct impression, honorable Sponsor?
REP. LAUREL. Mr. Speaker, Gentleman from Biliran, of couree it is
possible to have two bodies underhke the functions of the central Bank at
present. In fact, in some counhies in the world today there are organizations or
00020
v
05606
CABANOS.2 May 11, 1999 5:00 p.m.
separate organizations doing these dual funclions that our Constitution has
required. The only thing, Mr, Speaker, Gentleman from Biliran, is, this
Represenhtlon is not sure if the Constitution needs to be amended if we should
separate the dual functions of the Central Bank.
REP. ESPINA. The reason why this thought is emerging, is based on
several incidents in the past where we had several banking crisis. And the role of
the Central Bank has become so centralized, so powerfr rl because of the mixing of
the policy making and direction making function with the supervisory func{ion over
the banks, that somelimes, as has been shown in the past, the Cental Bank is
accused of favoring biggef banks as against smaller banks when these banks
incur several or reach several crilical periods.
So if we are to separate these two functions - regulatory, supervision and
policy making, maybe this picture of the $B as an over-povuerful body may be
reduced. And perhaps, there will be grealer consideration for equality in ihe
treatment of the Central Bank on the problems being experienced by banks of
various sizes. Especially, Mr. Speaker, if we are to considel tnt sometimes you
have a president or a chairman of the board of a commercial bank becoming a
'
member of the Monehry Board. Or a former ofiicial of the Central Bank . . . /dc
f
0002r
itilt;i
May 11, 1999 5;05 p.m.
Mr. Speaker. Gentleman from Biliran. The committee or
your committee has not really starled working on the review of the charfef of the
Central Bank but it is part of the program of your committee. We have started
lining up our plans to reviewthe charter of the Central Bank. This is in answer to
/)t
one of the questions. propounded. di ,r'(":
tr ,t
l
SANTOS - 2 May '11, 1999
I
.i
The other reaction would be on the dual function.
.j
{
,l
experience, Mr. Speaker, Gentleman from Biliran, the f<lrmer president who has
been assigned as governor, I could only recall the case of Governor' Fernandez
who used to be president of the Far East Bank. Personally, Mr. Speaker,
o Gdntleman from Biliran, this Representation believes that the experience of a
commercial banker would be most valuable in taking over the governorship of
the Central Bank, but youl' committee is still willing to \/elcome any bill or any
suggestion from the. membership to consider this particular idea or thought of
prohibiting a former president or a retired president of a commercial bank to
become goverhor of the Central Bank within a certain period, Mr. Speaker.
REP. ESPINA. You know, the idea came to the mind of thls
Representation because, forinstance, there have been a lot of talk that in the
rehabilitation of certrain banks, the interest of the government is jeopardized
because ofthe favorable concern, very often, by the Central Bank, on the collapse
of some banks. And what happens is that, the central Bank advances cErtain
financial shortcomings of banks and very often the bank is unable ,r'
/
0a423
ii t")
MATIWAT - 2 May 11, 199S 5:10p-nr.
a
',i| (PO - DEPUTY SPEAKER GULLAS)
i.rl
:{]
FEP. ESPINA
_ 1e unable to repay the Central
.:
J Bank for euch aclvancee. And thle hae happened
.i
on eevBral
occaeloneabeady, and ae a mattez, of fact, now and then
1
you see veFy, very crltlcal commente on
thie partleular
aetup.
Now, what doee thls propoeed. bilJ. propose on
thls
partlcu.Lar probLem? Should lt not be
better lf conuerclal
banke that are really weak and unable to compete
that they
be allowed to collapse rather than the government
comlng ln
and pouring ln money and in the end the bank contlnuea
to
col lapee .
REP- - Mr- Speaker, GentLeman from BiLlran, for

TAIJREL
the lnformatton of the Body, lt la not the general Banklng

Act that cover8 the 1aw or regulation glving or enpowerlng
Central Banh to glve &dvdncea t,o falllne banklne
lnstitutlons. However, thle Repreeentatlon would 1lke
to
say that the Gentleman fron BlLlran is correct,
becauae the
orlentatlon rrf the Central Bank has alwaye been not
to allow
anv bank to close, lf at all poeglble, becauee
they ar.e
wopr'led about the donlno effect wher.e
other banklne
lnetltutlone nay be affected and may follow
eult. And eo,
perhape 1f the Gent.leman will
allow .,, to loo, colre to the
f]oor and submit tlre charter change
that w6 ara
contempJating on the central Banr<
Act, we should be ebLe to
attend to this concern,. Mr. Spealrer.
{ orrrn
MALIWAT - 2 Hay 11, 1999 5: 10p.n.
REP. ESPINA. Mr. Speaker, one r..,f the 1b potntg

enunerated by the very regFected Sponeor of the meaeure ls
the lncreaee rn the investment bv banke and other flnenclar
lnetltutlone on elther arrled or non-alrred bueineeeee from
15 to 25- During the debatee of the Untversal Banklng Law
here during the Interln Batasang pambanga there waE no
percentage risted- r remember the sponeor of that meaErure
at that t l-me \f,ee prlne Mlniater Vlrata and I atood up and I
queetloned that particular eect ion. I raleed the
pogslbillty of monopo Iv by eome blg finarreial lnetitutlone
or farnillee to lnveei; ln eeveral alIled lnduatrles and
thereby practically monopolized a r:ertajn induBtry. EeveraL
tlmes I was etopped durlng that debate b..auae they had to
clear lt with Presldent Marcoe, beca'ee ttetually preeldent
Marcog in that Univer:ea1 Banking Law was l-ntendlng to Just
leaue a preetdentlal decree. And I remenber thar
Congreeeman, Assemblyman Tony Roman, whc., wae a merrber
of the
fnterlm Bataeang Pambanea and myself calleci the attentlon of
the Preeldent and requested the preeiclent to atrow the
Batasang Panbanea to pas the Unlversal Banklns Law becauee
we EaLd tt wae a very fundemental law lnatead of iEeutnE 1t
only as a preeldentlal clecree. And the presldent agreed but
we were requeeted by the preeldent that no cotruna, no word,
no eentence ehould be ehanged. Ancl in 6. caucucr ln
Malacanarrg we agreed. But when that law was being
read here
page by page, - . \
fir-
V
9a026
Cejes-2 tr I May 11, 1999
(PO-Deputy Speaker Gufl as)
REP. ESPINA. ... page by page, I was foilowing it up page by page and I
noticed that section. so. I interpellated the sponsor, one of the cosponsors
also
at that time was Jimmy Laya, and I was able to convince them to put up a ceiling
of 15oi6 -- that they cannot invest in allied or non-allied industry more than 15%.
Now, in the proposed measure, it is increased to ?-50,6. May I know the reason
for
the increase from the original 1506 to 25%, Mr. Speaker.
REP. LAUREL. Mr. speaker, Gentleman from Biriran, the reason for the
increase is to promote economic activity by ailowing banks to invest bigger
percenhge. And of course, this is with proper limits.
REP. EsPlNA. You know, as I mentioned earrier, during the debates in the
Interim Babsan, warang porsiyento. There was no rimit. And I argued

that this
was dangerous- thata bankorafinancial institution may, in fac,t, control,

let us
say' the cement industry or a particurar major industry. And during the debates,
the session was suspended severar times and Jimmy Laya tarked to the
President through the terephone. The president cailed me on the phone, I talked
to him, I explained my reasons and he practically confirmed my worry by telling
the sponsor at that time to accept my amendment to set a rimit of 1s%, now we
are increasing it to 25%. Does not, your Honor, fear that by increasing the rimit
that the [a] bank may invest in a particurar ailied or non-ailid industry that
there
is no danger of possibre coilusion among banks?
Because sometimes banks
have inter-rinking officers and inter-rinking
investments, so that you wiil find one
0002ii
'.il
Cejes-2 flA
l.:::r. May11,1999 5:15
ii '
,li!,
3 bank investing zso6 which is now the new rimit, another bank investing
:ll another
i
I 250,6, but these two banks have inter-rinking ownerships so you have here.a
possibility of one or two banks controiling a particurar

industry or business. rs that
not a concern that shoutd worry us, Mr. Speaker?
REP. LAUREL. Mr. Speaker, Gen,eman from Biliran, as mentioned
earlier, there are rimits especiaily on concentration as mentioned by the
Gentleman from Biliran. Because of the size of the bank as a univenal bank,
they are ableto cope up with the increase in percentage from

15 to 25.
REp. EsprNA' yes, but my worry is two banks w*h inter-rinking
ownerships or directorships will invest in a particular indushy 25% of that

industry's capitalization, then this other bank which is realy owned also by some
of the investors of this bank No. 1 wiil invest equivarent arso to the 2s%
capitalization oJ this new business or alried business, then what do you have?
You have two banks controfiing 5o% of the artied business. rs that
not a
possibility, Mr. Speaker?
REP. LAUREL That is possible, Mr. Speaker, Gentleman from Biliran.
REP. ESPINA. ts this not dangerous to the economy if some

major
industries will be controlled by just a few financiar instifution
with the muscle and
the financial capability to invest into alliecl industry?
REp' LAUREL. Mr. speaker, Gentreman from Biriran,

this Represenbtion
rs not worried about conkor by two banks
of a corporation as rong as the funds
of
the financiar ins{itutions, both that is, are used
within the limits prescribed by the
4a027
REGODON.2
May 11, 1999
5120 p.n
PO - (DEP. SPEAKER GULLAS)
REF' LAUREL' '

' ' are used vvrfirn the tmrb prescflbed
by $o General
Banking Act Mr. Speaker, Genfleman
fiom Biliran.
REP. EsptNA. wefr, Mr. spk6r, fiat is as far as tfie inbrests of th6 trvo
banks are concerned. But what l am really concem.d about rs lts gon.rar efct
on the total economy of the country where
a few moneyed ins$tutorc or rbrdilea
can contor' For instance, the ster lndustry, the minrng inctusty,
the ganngnb
industry or whatever other industries in the business
sector of he cdJnw. Ard
thd was my conosm in 1983 or 1gg2 when the universar Bankins
Law rvar
passd by the lntrrm Batasang pambansa and tfiat
is why r rimitEd it to onry 15j6l
because if a bankrng institufion can invest onry to a maximum

d 1ss on a new
lndustry, lt wll, take severar banks to get 5o% contror over that arfied Indurqy.
Brfr
if ws make it novrr to 2s%, then all it needs is two entities to conbol

alrea<ly s0% of
a pailicular induW. And that is my concern - - the concentration of rneallh, tre
concentrauon of financiar muscre in our country's economy. Thst b my ptlmary
concern on this particular aspct.
REP. LAUREL. Mr. Speaker, Genfleman from Bilintn, it may help

appreclats the sftuatlon of famllles that the Gondeman from Billran
melsond. ln
a bankrng syst'm, onry 20% ownErshlp by a famfry rs ailotflsd u,ffih
th thrrd cMl
degree. And so, two familres riay onry own 2096 each In wcry banldng
hsttdon,
REP. ESPINA. Very true, Mr. Speaker, but you do not m.d b be wlthln
tfie thrrd degreo famfiy ds to connrve or to get togfior and
--t
coltol a padculer
business activity. whire tre faw limih to 2o% the ownershlp of members of the,
00026
u/Ui3i
tir
REGODON- 2 May ll, 1999 5:20p.m
family up to second degree or whatvr degree, it does not prevent, for insilance,
inter-linking direc,tors of two banks oi three banks or two ffnanc{al Insfifutorr to

rally gain control u.p to 50%, Interlocking ornerchip of several . . .
For instrnce, if a family owns 20% of a bank, Bank 'r{, and ft owns 2O%
interest in Bank'B', and both banks invest 25% on an allied industry, so you ha\re
a famify which has already a big share in the industry. fuid if fterc se
interlocldng ornershlp d several banldng institJfions, then trvo or ftree or four can
realb get toother afld conhol a particular industry.
As a mafier ot tect, lt ls now happenlng. Th6 powor lndudry ls eonfolbd
by pracuclly ono tamlly, atihough lf you look ar rhe sbct(8, f|y dont ha\, rh
o malorffy, and ytulsy sefie controlllng hmll]; Meralco, for Instancs, AEtiEN,
ws kno/v that iho Lopeaes conhol it. PLDT, although it is a public corporafion, we
all lqrow that the conbolllng porver was Cojuangco. Ancl thls ls tlJ In many
omer. . . The blg conoraflons 0f Gfi0ngNn6l. Maybs on $8 doctrs, $elt
wvnershlp ls not really thal much, maybe they are llmlted to 2@;, and yd wc
kno,y that alt th businesss of tho Gokongrvel aro controlld by fie GokoneNvol
Ermlry. Tn|s ts true wfin Henry gyortnoeman.
o tto, wnfle me InE nt olmg ta$, t3 gtooo, Drn you ftncnv tn ms acuEt qmamcs
qf business transacdons and allianaee, it can rally happen

tffi a Frv gficxJp d
flnanclal Insttu$ons 0r famllles can, In lbct, control vcry lmpong|il segmcnt
d or3
Phfllppfne e,conomy and Indusay. And rhar ts why. . . /dr d1.-_
(..-/(
0002tt
DOMINGO .2 May 11,1999 5:25P.M.
(P.O. - DEPUTYSPEAKER GULLAS)
REP. ESPINA. . ., And that is why it worries me that we are now increasing
the percentage by which a bank or a financial institution may invest in an allied
industry. And I repeat, when I debated with then central Bank Governor
Jimmy
Laya and Prime Minister Virata who were the sponsors in the lnterim Batasang
Pambansa, of the Universal Banking Law which provided at the beginning,

no
limits, I was able to convince then president Marcos who then insructed
Mr. Virata
and Jimmy Laya to accept my amendment. As a matter of fact, the foilowing day
when that law was approved, it was published in the newspapers that the only
amendments accepted were the amendments introduced by this Representation.
And having worked so hard to establish that limit of fifteen (1 5%) percent, I am
really worried that we are increasing it now to twenty-five (25%) percent.

And
more especially, because of another proposar here which increases the

foreign
banks' ownership even up to one hundred (10006) percent. so, if you tie ail of
these together, when we have an economy which is not only controlled by
foreigners but controiled by a few moneyed powerfur families

and flnanclal or
bank institutions, that is my concern, Mr. speaker. so, how

does this birl
address this probrefi? yon na nga, how does this biil address the probrem of
possible contror by foreigners and by few

wearthy families and financial
institutions over some very important sectors
of our economy or industry?
REP. LAUREL. Mr. speaker, Genfleman from Biriran,

on the invesfnent
from foreigners who are ailowed one hundred
(1000,6) percent of orvnership, it
must satisfy two conditions. First, that

it has to be a dishessed bank. second.
(
0c030
DOMINGO .2 May 11,1999 5:25P.M.
that capital is not available in the philippines. only then will they allow a foreign
financial institution to invest one hundred (1000,6) percent in a bank in the

Phlllppines.
REP. ESPINA. Mr. Speaker, let me repeat that. One, is if a banking

institution is in distress ancr foreign money comes in, the foreign money is
allowed to own one hundred (100%) percent of that distressed bank. And the
other one is that, when there is no capital.
REP. LAUREL. when eapitar is unavairabre, this is another condition. rn
other words, if capital is available locally, the law will not allow a foreign institution
to own one hundred (10006) percent of a banking institution.
REP. ESPINA. when we speak of the quarification that capital must not be
available, are we talking of the distressed bank. Are they exclusive or inclusive?
For instance, Bank A is in distress, are you telling us, honorable sponsor that if a
bank is in distress, and there is no local money that can save the bank, then
foreign money can come in and own one hundred (100%) percent of tirat bank?
The qualification that there is no avairable locar money does not apply
to a new
bank. In other words, forelgn money cannot come in and set
up a new bank. The
gateway to allowing forergners.to own one hundred (100%)

percsnt of fire bank
must atways be that it is appried to a oistressed bank

when there is no local capital
available to revive the distressed bank. That is the only

situation.
REP. LAUREL. Mr. speaker, the Genfleman from

Biriran is correci.
0003-t
{\
DOMINGO.2 May 11, 1999 5:ZSP.M.
REP. ESPINA. so, there wiil never happen where a foreign

bank comes in
new without joining a distressed bank and it sets up a rrew bank one hundred
(OA%) percent owned by it, that one, that is not allowed. ../mvd
040:t'e
f,,,1
Mlluna May 11, 1999 5:3Op.m.
come in, open a new bank and own it 10006, that is not possibre under this
proposed measur.
REP. LAUREL. The Genileman is correct, Mr. Speaker.
REP. ESPINA. so, it is onry when it comes in to save a distressed

bank.
REP. LAUREL. That's correct, Mr. Speaker.
REP. EsPlNA Now, going over the rist of 15 areas over which some. and
I would admit, very meaningfrrl amendments are being introduced,

it however
impresses this Representaiion that to some extent it reaily
ig very protective of the
investors in the banks and of the depositors. worrrd the honorable

sponsor admit
that?
REP. LAUREL. yes, Mr speaker, ancr arso if I may proceed with

the other
requirements, within,five years, the foreign investment

must have been sold
locally so that there is a reduction of 1506 within five years.
And within another
fve years or 10 years, it must have been reduced further, I believe,
to the fune of
6006.
REP. ESplNA. So actually, these foreign banks

owned by foreigners -
100% in several years, their ownership will
be reduced. Now, how ar we to
implement that supposing there are
no rocar capitar avairable to procure the 15%
or the 40% if the maximum percentage

by which a foreign bank may. own
a @%7 i
000iJs\
Mlluna ^
May 1 1, 199q
5:30 p.m.
supposing on the fifth year, there is

no avairab{e rocar fund that
can retrieve 15-0,6
of the assets of a 1000,6 owned

foreign bank, what harrpens?
REp. LAUREL. Mr. Speaker - Genfleman from Biliran, the propose.d

regisration does not cover that particurar
case. However, we have to consider
that'
before the centrar Bank atows the
entry of a foreign bank, it arso investigates
whether this foreign institution not only
can provicle capital but has the know-how
and there must be a pran how
to rehabiritate the bank which shourd
be crearry
presented and approved bytheBangko
Sentral.
REp. ESplNA. Now, on the overall view,

the proposed amendments are
luned to the interest of bank

investors.
Now' in connection with improving

the situation of rife of the Firipino peopre,
'
In connection, for inshnce, with creating
more entrepreneurship, in reration, for
instance, to providing job opportunities
for Firipinos, in reration, for instance, to
providing easy capitalization of new businesses, easy procurement of
rehabilitation funds for certain induskies,
wit it be easier no,jv to bonow money
frqm banks to set up businesses and
in setting up these businesses proVide
greater employment for unemployed
Filipinos than in the present system?
lf we are to approve this measure

now, wit businessmen be abr. tO procurs
easy capitar for new businesses
or needed funds for rehabiritation
or expansion?
LEDESMA. 2 ilay 11, 1999 6:36 p.m.
(PO - Deputy Speaker Guftas)
REP. EsPlNA. ...wil the so+ailed pavrn shop menhlif of banr* now be
remored under these intoducod proposed amendments or measure?
REP. riuREL. Mr. speaker, he Genfleman fiom Biliran, frh Reprecenbtbn
hinks so' There is accessibility of credit for the public, protec{ion is given to the
depoeitors at the same time. There wiil be sounder and more stable
banls. Thre will
be more competition.
REP. ESPINA. Because, Mr, Speaker, in the long run, the pdmsry
conoom
would be not just more profib for the inveetors in the banks. The oonoom
will not iust
be limited lo the interest that depositors get but for a larger impact
ln the snorry of
the country. The major concern realry shourd be, the banking
sctor, as a cortribuhr b
total economic development, will be measured by the rate of. business
eslablistrments
being set up and their success, the inllow of foreign exchange through
tho success of
businesss which geb proper financiar assistance from banks, speciaily

the ooort-
oriented industries. And also, of major concemr the degree by which tfie
ac{inltes and
transactions of the banking institutions open the door to more unproyment

Bocause
this Represenhtion believes that if we can add to the income of the

Fillphos by rvay of
the foilovring: (1) incrase their present income; and (2) prorrde Incoms b t|,oso
without income. In a cycricar efiect, Mr. speaker, this
wourd increase thc purchasrrry
power of the Firlplnos, resufting in the need
for more manufactrred produc0s and ths
need for more manuhctured products will further
require the need llor more snp|o)/6.
And to these three rmjor concerns, to my mind,

nourd be measured the srccess ff any
ailmpts te improve our benking syshm.
n11
rJik,'
rt
0003it
'.).f.'\l I I
LEDESMA. 2 May 11, 1999 6:35p.m.
Now wlh due concern to this which l have mentoned, can the hononabls
sponsor mention to this honorable Body an estimate, projection, ftat hs apporrd of
thls measure wltl result in the unfreezing of so much miflions of pesfble capfrab for
new bueiness or will open to so many thousands of possible ernployeeo, ae tha nw
structuring in the functions and accountabilities and responsibllitles d benkinc
instltutions wlll propel industrial growth and economic derrelopment. Fhs t been
considered by the committee in terms of its actual confiibuton b economio
developmenf? Any projection on freeing of capital, inerease in capiht avalhHe fior
borrorings and possible increase ln employment generation?
REP. lSuREL. Mr. speaker, the concerns of the Genfleman l?om Hliran ls wry
well bken. This blll, Mr. Speaker, witt assure a more stable banking sy,s0em. ltwl[ help
promote c,onfidence. ltwill also lncrease deposits, thereby increaring
... bU , 11
ill"' I
0003(;
n2fii i
. ;1
C.lAgr"ril,:rr - 2 tlir-r, 11. l.!l!! v,1v }-r.uli
(P0 - Deputy Speaker Gul Ias)
BEP---IAUBEI-. thereby incrFaning loanabfe funde.

It will help improve the econornic actjvj ties in the country
and thereby give more enployment to our peilFle.
REP. ESPINA. Mr. Speaker, I feel comfortable with the
ans\,rer, j.f that is the projected resu]t of these najor
changes.
Now. let me ask, are mutual funlls covered by thle
measure? Mrrtrra I funds?
REF. LAUREL. No, Mr. Speal<er-, Gentfeman from Btllran.
It is not covered.
o REP"BSPINA. you know, the reason I mentloned rnutual
fund ie that it ls one of lhe-in the United States and even
in Europe, mutual funds are veritable sourcee of capi,tal
formation- And I think what is realJ.y needed in this
country is capital fornlation. f cannol, believe that the
Filipino-s are Foor hecause we do nnt have the capacity,
mentaf capaclty to devj se ideas and means to improve our
living Etandarda but becar.lse we slnply do not have
sufficient capital. - Ar,rl what cap:i ta 1 vre havs now in the
banks are verl, oft.ell rererved foy, l_rirr ],orrowers and blC
trusiness, Mrat we nee(,1 tLr r,1eveJ_op ii: ,u.tl country
1e not
onfy big business but sn,a1j. .bt.sinesr:er; i n the countryalde.
Now, j.f you are a snall businensman, very
often, you
are not even entertaine,l L-ry the Lrernlis
" But when you are.
0s037
C"TAguilar. * ? Mrrr l1 l Oclo 5:40 p.nr.
for instance. an Ayala-owned corpitraf ian or a Lopez_owned

ll.'rlt nr these b j g cr-:rl.,orati r,n;-_.. yLru know, the banks
co rpLr I'a t
even court you- They cal-l- you tD borr.ow_

I remember when I
was vice president of the
corForaflonB of the Contlnental Manufacturlng CorForatlon,
the grr-rup of conpanies then owneci by Mr _ Dewey Dee, iyone
nga banglro pa ang tumat:rwag kay Mr _ i)ee 1-3pa mangutang. But
a small entrepreneur going to thn: banks wi-11 feeL
overwhelmed by the attil;uile of banking i-nstitutions.
Nr:w, will. this mei'.slrre change t,hat atmoephere? WiIl
smaLl busi.nessmen itave free and ,:,tua.l. allceoE as the blt
busitressmen in the FaftakinE of whater.rel capital buildup
there will be? As the honorable Sponsor rnentiohed, if thie
l:i11 1-* a1-rppoverl, thr:1.'- wi .l L b,: qleal:.,-r. ronf l-dence by the
Clepositors E!( we v: i I. I t,e ab] + Lc 1..,r.rr capltal, l-arge
capl.tal , avai lable capit.al in tlie.se banlirr .
But agaln, m1z qneetlon lEj. witl thLF not only be for
the big cliente, and t,he small players in the phlllppine
economy wiff not have a simiLarfy sj.tuated acceaa aB the big
ones?
REP" Mr. Speaker, Gentleman fron Billran, of
LAUREL -
course, the coneern of the Gentleman from Biliran i6 going
to be addressed because this General Banking Act doee not
onry applv to the big commerciar. banks- The rural banks are
included. fhe thrrift banke are included, So that in the
000aa
CJAguilar - 2 l{ay 11, 199!r 5:40 p,nr.
different areas in the lountr1., al-1. w !. 1 .l benef it from this

new law, Mr. Speaker.
REP- ESPINA- Yrir: krrr:w. onrl r-.lr aracter lst ic of the
practices t-rf the Phi}ip,p.l66 banl<s j s th j.s. Pag hihiram ka,
unang tanong, ctrllateral. Collal,er.'al , Frr.urily. Our bank
instltutions are vel'l' Et,tcurity consc j_cr.rr.-.r . Br_rt not to the
ref atives ,:f the board of r{ir"ectors, As n matter of fact,
lt has been common knowledge that verlr .-rf t',eu. the: result of
coLlaFse of Phillppine bankB is the trust thai it g1ve6 to
relatives of offlcer-s of the banks olr inveetorE. Has
nakRkahiran Bila. merlalaklng alltLrlttt.s at hin{-li nakakabayad.
Ae agalnst Anerican banks whel-e maalii wala kang
collater.al, maganda ang project stridy mo. ancl the technicai
staff in t,he bank knows that 1f this pro.Ject can pueh
bhrough, lyong utang na hihiramin ay mababayaran, the bank
lende. Dito, mag-Eubmit ka ng project 6tudy at walang
collateral-, hlndi ka papanslnin ng mga bangko.
Now. this proposed meaaure, Mr. Sp,eaker, does i+,
provide for a possible change of thls attitude of banke?
REP. LAUREL. Mr. Speaker, Gentleman from B1llran, you
wl l. 1 be happy t,: know that
000ii$
Antule- 2 May 11,1999 ir40 pfl.
{PO - DEPUTYSPEAT(ER GULLAS}
REP. LAUREL. ...you sill be happy to lmow that your Cornrrcittee
on Banka and Fifiancjal Intefinediaries noticed one particular Eectioa in

ilre draft bill that requites all botowers to gubmit a financial siatffitrt,
$ow, your comnrittee realized that there tre sorrre microborrowers that
do not eveu have finasrcial statements or collaterals like those selling
fishballs. So we noticed this in yoru committeer Mr, Speaket, and

therefote we temoved the requiternent of the submissiot of ff'rnlrr'ial
ctateeent.
o So that whet we are trying to say! Mr. Speaker, Gerrtlemslr
from Bilitan, is th.atwe have so gtudied ihig measure that we are cetrtain
that a1l wallrs of fife u"ill he cowered and w.iil hawe tl"e opportureity to
borrow and del witl ti.e barikitrg system,
REP. ESPIILA, Mt, Si;eeker, I llnd.erstr.td tlnt we ha.Je vicitorc ea I
will ruspend my itrt*rpellation of the honorable Sporlsor to give way to

the introduction of the viritorg of flre Houre,
THE DEPUTY SPEAFiER {Rep. Gullas}. Therik you dietiaguirhed
colleaglre from the tone Di:rtuict of Biliran, the llnnorable GffT Eryina,
Dirtinguished DeputJ' Majority Leadet, lhe Hoaorable Gilbeft

Teodoro.
REP. TEODORO. Mr. Speaket, wifll the gracious acquierceace of

the distingrriahed Gerrtlema' frorn trre Lo'e Distf,ict of Bilitan, r would
to aeknowledge the I'"esence in the galery of tre meaberg of tJre
fiIce
*
Lakbay Aral gg froa the Joeefina H, Cerillee pohtechnic Colbgb q/itb t
-lil":ob0'ao
Ansula - 2 May 11, 19gg 5;45 p.m.
their head of delegation, Mis* W9:rifreda Rico, and they a.ro coastituerats
of our distitrguished colleague, the Honorahle Cetilles, &om tlre gecond
Dirbict of Zamboanga del $ur. {dpplauseJ

THE DEFIIiIY SPEAKITR {Rep. Gullas). The Chatnber is horrored by
jhe presence of our distinguished guestsrcourtcfly of out colleague, tb.e
Eonotable Cerilles.
REF. TEODOEO. Mr:. $peaker.
THE DEPUTY SFEAI{ER {Rep, Liull.ae}, nistinguished Deputy
Majorit"v Leader.
REP. TEODORO. Likew-ige request to be aclcnowledged ate. visitotr

&om the Municipality of Cordova, Province af Cebu, They are led by tJre
honorable Ari*iSh Sitoy, the Mayor of the Municipality of Cordova and
they are guestr of our colleague, Congressllran Hefferar frorn the Sixttr
;Dietr{ct of Cebu. {Applause)
THE DEzutY SPEAKER (Rep, Giilla*), Ttie Ctrarnbet likemise is

honored by tle presence of our clistinguiehed guerts &os the
Murriciliality of Cof,dovo.r cor$tesy of our colleague, the Honotable E&en
Herrera, lhe delegation is headed by th.e murricipal Mayor,Sitoy,
REP. TEODORO, Mr. Speaket, I now yield the floor to the

Gentlea$r frorn the Lone Digtriet of Eilira' to contirrue hir intetpellatioa
of the Sponror.
THE DEPUIY SPEAKER (Rep, Gullas). Thank you diatinguirhed
Deputy Mfljority Leadet, the Honoral:le ?eodoro.

0004r'
in
tuEula - 2 May 11, 199$ 5i45 p,m,
The Chair now recogniees the clistinguisheci Gentleman from the
Lone District of Biliran, ihe Honorable Gerrv Espina, to corrthrue his

interpellation,
REP. EEPIIIA. Tha:r.k Srou very rnuch, lVIr. Speaket, and I woutd like
to take tJris opportutrity to personally greet also our wisitors Maayong
-
hapon sa inyons ta$afl sa rnga constituents ni Congresswoman Cef,illes
ug keng Mayot Sitoy ug iya mga kauban.
Mr. Speaker, oree of th.e propoeals of tlais mcrasure is to claseify

bankr into ietraruic, coopsrative a:rcl utriverudl, Mey we know, Hr,
Spealer, the reason for the classification of banks into iqta+nic,
coopif ative and universal?
REP, IAUREL, Yes, Mr, Speaker, Gentleroan ftom Biliran,

Utiiversgl bailk:s, islgiiiic baflks std c(roperativ-e li,arilcs wste added to tlre
clqsgification of banlrg which originally i*clucled only conruercial, thrift
and rursl bonls, If there are othet banks irr tlre future, Mr, Slpeaker,
Genflersan from Bilirah, that may be inclu<1ed in ttre classifieatioflr tl.e
o Monetary Boatd has been empourerecl to ha-,re the authoritv to clasgifu
thern as well.
REP, EEPINA, What ie tlre basir, Mr, Speaker, for the

classification? Originallv, the classification is commercial fonnk, flrift
bank and mral lranks. Norv, we are rlaking it gix. 'We harre UniVCtfal,
cooperative.../ala
000.r1
i")
flrl;"itill - l i;i;l,r: I !. iii'lt/ r rj I rt|!
(PO - Deputy Speaker Gullas )
REP FSP|hiA ..utriversal. c$operaiive anr-l lsiamic. What is the
basis {or the classification? ls it capitalizaticrr. is rt reiigrous because of
t!'te classifrcation cf lslamic barrk lr is lt tf:c iniriirtr.t. b,y which the bank
peraies that has made the commitiee cieilrii$ io introduce thiee
ar^lcii{iorral ciassification cf i,anrts as lrlarr:c iirri'.,ersal arrd cooperative?
i?tP LAUI?[i . il; Spr:a<er Gi:,-rihiira;r {iorn Biliran, of course,
tirere :are Ciiferent otrelttt()rt$ '-)t iircri() l.,iurt.,:j itrrrl fire Centieman from
Biiit';,rtr is rorrect c:a6.-itai is unr'l r;,i lirc ,-;cxrr,icl:raiicns. the hype of
servrce*i ihe type o{ oil$tniriefs ;lnrl. Ar: I rnf,Iiir-rrir:d eariier, the type of
o1:eratic:ns nece::sitlltinc tile ,,;lassi.iicali,_lrr ,:f !nr: ii{ferent banks in the
coltntrv
f-iIP ES]:ril\jA !,/oi, lq;;sy,i i{t;t<;1.'t i.,i;i ilr,-.,r;e;S a ierm irr pUbfiC
3{lmirr!,Jiiaticrr llot gci Ilrr:vr t-ir;ri_i li; i;rili :! 'lir,o" iiut it is aciually just a
descrir:ticn of a pi'actrce irr ecrTriri;sh'aiirr' i;iiynrir.:atron that there is a
ten{ienc'r' to ci'eate anii r;i'eate arrii thi:s* ,uihii;ii ai-e ci-eated

has a
tenCenclr ic grow big and l;iter ic rrei;te aniinei
[:or instance, in these firre' ne',v ciasr;ifications, courd noi rhe
lslarnic banl< qualify under the c.iginar cias:;r{ilatro' of

commerciai, and
oCI 04
it-' 1
iili i..'ir:: it: ,. ,1.

i: i,1,, I : iitrll (. (Il DM
the i:t;r:r,,:iatjve ciir_iirJ it rr1;1 1;1;1 i.tfl{"Jr:ri iirt i1l i,ittlri ancj $O On, fl,4r.
.$peaiir:i?
ftf ir LA'tjRi:;_. Oiiqinsjj,u:, ivii. Si;caio,ei, i]rilii{jinan fi-om Biliiai"i,
under thrift banks was cias:;!fiecJ ihe irrrei 1.,:rniiinq s'",slem. Bui the bill as
stucliet1 arxl pesenfed noil/ tr) the iicci hir{ {rr r,.:.:l;,r:,sify the banks egarn
iii orrier ihat there will i:e. nc ccnfuuiorr /rs l.;e r:aicJ eariier, for insiarrce,
the lsiarnic banks have a {iifferent vier,v of cepusrts. They are nct
suppcsed to pay interesi in loans. so it is a irtile i:rt different fronr the
crdinanl banking s'lstem; Genileman frorn Bilirail
l?FP. E$Pil'iA cor-:ki ii nof be i*orurrer:! rri*,reiv ii'r tire guiderines
cn $r:perrlsron of itani{$ wltilcuf ii.lctr:.:sailiv i;uriinil up uth an additicnel

classif!lalion ar:d ntaybe.l beior,t llii: ar:;.,yl:i , ,.r: :r;lithl ask holv niany
isiamic banks are there in the $ounir,/?
R[P I_AUREL Mr Speakei, Genilemair i'o;n Biiiran, ihere is one
lsiarnic bank that rnis Reprssenfaticn is arariirc .:i - Al Amanah Bank.

iruf it ii; ieaily for riarrtv aiul fcr rii,ii,.rlir:esi lir;rl ihe uiassification
has
treen qiverr
Ri-:P ESPiNA y"ori 1'^r]orr iht |l rs r:othing ihat fhis

Repre5-*p 1- 1,..n haS ;:iilarrrt, t.,i rr r,i.'iir,:'r r',1,;r,iin15 Lriir iwUSlUSt
thlnking in
tei:nr cf elfertrve aijirrrrristi aiior'; i.i.i ;riiiirirr .rrr,.i;iii;irai crass;ficafio' for
0s044
i'r , ri)
t], 11,
i.ir-riil-tliir - .t
fd111' i! ltrtit; 5 {ti'l-- nnr
lslarnic banl<s, \4/e wili neeci mcre ,:rnpiuy,.r"* irrrd already ihere
is a
generaldescripiion that ihe bureauuacy i$ sc o'r*r staffed
that even if
You feillove 25oli, of it rt can siiil go crr ar'd -.ffr.cfi'.iel.i,. oneraie the tasks
of govei'nment
Buf at any rate, fuii. Speaker, there is pcirrq io be iniroduced in the
next fe\A/ day$i 0n the lloor a i"eiail irberajiiaticn i:rr.:nosal ivhich would
u tc- r-.nuntn,
aiioril k',iciijn canrtal in t;i; ii;lo ih* r'::ti;il i,;;r!i;i::t..:. ltr::r fir:., L,\Jtll llt y . ]-'
/l, v
Z
0004ii
.l
q11
BRACIA-2 May 11. 1999 5:55 p.m.
(P0-Deputy Speaker Oullas)

:
RFIP. ESPINA. ,.. kr go inkr the retail busincss in the country. And
the talk is that they rnight be allorvecr between 60 to 100% ownership of
some retail businesses in th.: country. Norv rve have this proposal to allow
:
foreign capital to o\\rn np ti, l000,ir o[ banlcs. I arrr not necessadlv against
this. Mr. speaker. brrt I rvni.just rrrinkirrg ahrrrrt rlre possible

effect on the
Filipino entrepreneur. We have the relail lrn<le lrr u lrich they can come in
up
to a 1000/0. ws have'or,v this proposal thal they own up to 100% of the

'ar
banks. You know the balrks arc the lifebloocl of the economy, in any
conomy for that mattcr. Are we not overextending ourselves in terms of
being very econornically hospitable to foreigners to the extent

that in the end
we might - all Filipinos or most of ma-v just become workers of

's
foreigners and al worst merery co^sumers of rbrcign capital and foreign
business? Has this ever entered into the consideration of the

oommitteo in its
proposal to allow up to 100% capitalization of foreign banks even on
distressed banks? Is it not befter that if a bark is distressed that it be
allowed to die a natural death? The lesson of nalure

is survival of the fittest.
Is it not better that we, through the process of elimination

of the wealq in
fact improve our economy especially in relation
to the possibility that we
l\
BRACIA-2 Ma.v I l, 1999 5:55 p.m,
r lplnos mrght Just bccolne workers. eruployees, at worst consumers of
foreign businesses?
REP. LAUREL. Mr. Speaker, Gentlenan from Biliran, just like the
Islamic Bank there is a special law ctrvering rhe Islamic Bank. This is the
reason why this New General Banking Act addresses that situation.
In the
s&me mulner, Gentleman from Biliran, that there is already a Republic

Act
7?21 regarding the entry of foreign banks into the country. That is the
reason also why this Genoral Banking Act is addressing the same problom.
However' for the information of the Gentleman from Biliran, Mr. Speaker,
there is no situation yet in the country where a lbreign institution or a foreign
company owns 100% of a banking institutio.. on the matter of aflowing a
bank to fold up or die a natural death, we really do not know if it is a good

policy to do this. However, at the nrontenf the present Governor of the
central Bank has fbllowed rhis pattern iirr the last 4345 years in his whole
career in the Central Bank. perhaps it is a good policy.
REP. ESPINA. Or perhaps^ Mr. Speaker. il is about time that we
review and change the policr,. Now. iI'u,e pursue frrrttier

this ooncern, let us
picture a situation" Mr. Speaker. under this proposed

measure now, let us
assrme that there will he orre or trvo banks orvned

completely by foreigners
00047
' o?gs
r/. )
fir.)
BRACIA.2 May I l, i999 5:55 p.m.
because these banks rvere fol.rnerly distressed banks.

And then, if we shall
now approve a bill which will be intr.oduced on ,
u4 ye4
!i: \
f:1
CABANOS.3 May 11, 1999 6:00 p.m,
(PO - Deputy Speaker Gullas)
REP. EsPlNA. . . . a biil which wiil be introduced on the froor of this
assembly in the next one or two days - the liberalization of the retail trade, again,
with the possibility of allowing foreigners to own sixty to one hundred percent
ownership of rebil outlets, does not, His Honor, piclrrre this possibility to the
disadvantage ofthe Filipino businessman, a bank owned one hundred percent by
foreigners, a big retail or.rtlet owned one hundred percent by a foreigner? In
access to capital buildup and expansion, these foreign rehil oufleb later on vrhich
will be found in Davao, in cebu, in surigao, and other major cities could easily
draw from these foreign-owned banks, while the Filipino owners may have
difficulty getting sources of funding for start-up operations, for expansion, or for
backward expansion. ls this not a concern that we should be looking into in our
consideration of this measure?
REP. LAUREL. Welt, Mr. Speaker, Genlleman from Biliran, perhaps this
Represenbtion should go on record. Some 20 or 25 years ago, this

Representafion was a member of the Bankers Association of the philippines,
Board of Directors, and at that time we were arready discussing

- during the
o governorship of Licaros, the possibility of allowing

foreign banks to snter the
country. And this humbre Representation's position then was,
whoever conhors
the banking system conhols the economy. And therefore
it uras this
Representation's position to go against tho pran of the
Governor of the cenbal
Bank to allow foreign banks to come into the
country.
0C0+{i
CABANOS - 3 May 11,1999
This time, it ii no ronger this humbre Representation,s position because
times have changed - we need more capihl, we need more investmenb. rvg need
beter technorogy. And therefore the opening of the doors

of the country to foreig!
banks is a positive morre by the country, Mr. speaker, Genfleman

from Biriran.
'REp' ESplNA.
wet, I fulry agree, Mr. speaker, to the thesis that for a
faster economic growth rate, we need capiblization. But
should it be to the level
'.:
that we will allow one hundred percent ownership? Because
there is nothing that
prevents foreign money to came into Far
East Bank, for inshnce,,and get fofty
iperoent of it. or to Metro Pacific, and get fifty or evn forty-nine perc.ent of the
stocks. so foreign money can stiil come in without necessariry owning

one
hundred percent of a bank. For instance, if we need
$10 bi[ion in our bankng
you know, spread their money in various you have $100 millign to
banks? Ancl if
invest in the Philippine bpnking industry, you can certainry do itsy'gemng

into Far
East, in severar other banks. whire, of course, it wilr be
vou c
convenient if you can own
But again we have to barance this with the

interests of the Fitipinos. There
is hirwever one positive side to it, I wifr admit, especiafty in this shrFup of
business and even In the expansion of
business, it is easisr to hlk with foreign
fon
0c050
l
ASIA trA{:I':If; FAI{I. ]. /.}}I,II::.hITAEY r.. FiLJr,I

H{: CF-RE:FINF{ I H !i
[]PF"I"I I
,.Ianu.:rry J.4. j.9i.',.rl.,f.lJrii:r lr:i .l,r l- -. :t..i. ..'f._:ril ' L', I"-
n_;
1O114
l:nmnrrnity, *|lc! r.rr: .ll,r:rr.lr:! .l:i!,:{: t:r:r .-ri ?r.:, |r J-n glrch
fl efrdedvf,rrs
tt:qEtl'lr:l- wi th a-1.1 t:r-f :,irrr --
'f'haa! !r. yol.r-

v11*t..y tlil.ti:h" i f'rIi!: I at.tili,r I
HnH. SA$.1:t.!,. I'ti.rr. I e:.,r.1.l. i:in 'i:fir:.: !. Ja;1ir t,r t,a;r 1. * Edgardr: J-
Arrgara. F r.egir!rirn {: n.f .Lh{i F'hi.
3. ;i. p1::i.ri* llii.:r.r..,r.l:e, tg del.iver his
t'emArl,;s- ( Appl;rrr*e )
FION - Af{GARA - -fh":nlt
,vcu v4: !-i. r}1.!ch" ${?crqrtary SAbie-
l"lr - Fr'65'r'.cle4r te y(:}lir- tix {:r* l-r"!1.j:,'*,, prifie
J- llin:i.ster
I'laka-$$fl{:q Pres j.tl*rr't cr.f th{il 6*j.a F,"rr;i.f
it F,arliA0tent*fy
liBrurn r I'lr'. .{:ipea l.;er
o .t}ie l-:ha j. rni,_.ifl {:i.f 'l.he
$ecand General
Uonventinn Gf {he Fcrru*r" lSenatr.rr ri,l,',a:-qp, Speaher
Fr11
Tefipore Ralrl Dazan ExceLlencies u.f thi+ F:iplonatic
Ccrps,
distingr.ristrerJ pa rt i ci Fiin ts an rJ f r.:t.erncts _
ThF yFar L993 errded orr a ,lotc- clf g.L*baL

sptirnisrn dftpr
riitrugg li.ng tflolrg h rnr:nth= .)f Lrn{:ertctin{:y*
Scne Foli tlcal
.rnalys t,u i$ .l.act h*ve .*tr.:lt:.,t-.,rrid th*.t hr:i..lli th* of
the '=es$ation
GnLcf tdar
{nd th Easit_tlt+*i.l rr:lnf r.r-,n .t:.,;r .l
i_ nn o .the era oJ
j-deol ngy-tralretl c#nflir:.t.v
may Lu? i:!.r{:r=
fn tlre fieirntirrlc.s a w*lr.lcl *LrdiFrir:e
!/ri tnesgE,d the
ljsrael i and the Ft-S leadFr$
:3h"lliing lranct5 in the ldhite
llc}$se after de+cades t:f cfififLicts
a,.id i|.l ,$fjuth Africd, $e
i:ee {:l.re leirders (:}.f the Afri c;rrr
l,la.t j.r-.rnal t;.}ngress
and the
$o4th Af ri c{s!r.} gfiv6r.rrrnftnt :i:i
r;r,-r:i.nq ,:r pleace 6cc6rd
in
Johannesblrrg after n :L;ifetj.m*
{rf .?ftmj.t:y-
Lh *_hp ecorlrrdti i: .f rc,rr.l .!:hn
n {:!_ra:.:Ei$li of the hard-
perfo!-fti{lg r?{::On{:Jn i r,,ti r:t-f
/.lt+i;i r*.:i= pr..-,_r:i$,'dn and
laggdrd
+:canornif}s hftpec! t_* r,rnrr.s
Ia.t.r: tlieii. gr_rr::r+-ri*,. /tnd
as a fi tting
l'?:
SANTOS - 3 May 11,1999 6:05 p.m.
' Now, another major concern of this Representation, Mr. Speaker, is

the
very distorted, if Imay call it, relationship between interest by depositors as
against interest charged by banks on various types of credits or loans. to the
extent that it has been a common opinion that in the philippines the worst
thihg to
do with your money is to depo.sit it in the bank, because whire you get,
as interest
earning, a very very small percentage, the bank makes a lot of money by lending
your money at a much higher rate of interest. Does this proposed measure
address this concern? This has been a complaint of many years by bank
depositors. Bibigyan ka ng interest na 506 pero pag uutang ka sisingilin ka ng
184/0, 17o/o- ls there a provision in this measure to make our banking practices
and operations progressive that addresses this particurar problem, Mr. speaker?
REP. LAUREL. Mr. Speaker, Genileman fronr Biliran, the matter of
interest rates has not been actdressed by this bill, because at the moment there
rs
a free market. The banks can pay as much as they want on deposits and charge
as much as they want on loans.
REP. EsPlNA. That has been Mr speaker, the practice, but considering
the fact that really, even if we compare this with other countries,
the difference in
the practice of banking system in the phirippines, between
interest earned by
deposits and interest charged for borrowing is so big
that the poor depositor is
actually being used by ttre banks
.-JE'
fl
MATIWAT - 3 May 11, 1999 A- l fin
'Jrrvtl.11.. -
, -i l,
1
(PO - DEPU?Y SPEAKER GULLAS)
REP. ESPINA. belng ueed by the banke very

unfalrly ln the Eense that the bank makes a 1ot of money out
of a depoeitor who gets only a minleeule amount of the money
: J''
that he depoeite 1n the bank anci whlch the bank lends to

others at much blgger ancr hlgher rnterest- Ie thie not a
worthwhile putt j.ng into our law in order to protect
.concern i r '' :
our depoeitore?
REP. - lulr:. Sr:eaker,. Gentfenral from Blliran, thi6
LAUREL
natter 1B really compFti.tion amonF banks, so that Borne

: ._
batklng lnet,ltutlone .f [er. h1e]rer rateB t.Lr depoeltone and
.aome banklng instltutlotlB Lrffer lowel, lntereet ratee on the
loane- Thet is why pricing is not covered by thle amendment
or" thla new General Banklng
Act, Hr". Speal<er".
REP. ESPINA. Whl1e the concept that free market
deternlnee prlces or In thie case lnterest, natea, ,!re are
aLeo aware that very often there js coLluslon anong blg
bueineee BO that thelr lnterest, 1s protected a8 agal-net the
interest of the many who are depoeltors..
A very good exemple ls the olf 1ndu6Ery.
o we know that petron 1e the blggest and the
o11
t.wo
others are sna11er, perhaps Caltex 1s the snallest
of
three. And yet lf you look qt the prlces of thelr gaaollne
and thelr dleeel they are all the eame.
Now, we kno#'foo
fact that the bigger "
a company is, the bigger La lts
exFenae' and eo on, the more empl"oyeee.
And I an sure there
f\ .l
,. r| t'l'i- i:
f,1.1.11\'IrIwAT - 3: May ,11, lggg 6:10p-n.,': ,,'.ti'.,j,.
: i. J;r', .
even in thelr capaeity of reflnlng cnude. And yet parehas

ang presyo nila and they eay hindi glla nagkasundo.
Now, even if you look, Mr. SpdAker, at the zubllehed
lntereat ratee of L;anke arrrl I 1ook a.t, lt almoet everyday,
becauee the buej-neeE paEe -,1e one of my favorlte Eectlone of
newspapere _ You practjcally see almoet the eajh, ffitErEsx,
, tates.,by banke,. eo where ie the free comrretttlon
aiidng banke
that 1e aupposecl to prot,ect the lnter.eet of the thOueandd:ot
depoeltr:rs? Kung naekakar.oon ng dl r,er.errrva l.yone .1nbFts6 ng
,.,{!Sa I Lang, hr't. Lf you ,Iboki,at thelr
,lxangko, , kaunt lne-karrnt
g'lrbllehed lntereet rates'l ]_encllne rrJtes j_n the. nevrdpard},E,
haloe parehas. So. . parang the competi.t j.on does not' affect
,-trheir. declslone on hovr nuch to char"ge a frorrower and on how
rnuch they wlll give to a r.repositor." IJow do we,,cur6 tliie?
.$ftouI.f, . it not require more or lese a ata,tement of policy,
,,.914en wj.thout citlne thereln. f lguree?

REP. - Mr. Speaker, Gent leman from, Blltran,,Wlien
LAURET
g.$,,,epeeh . of .interest ra.tes pald. .by . the banklng ayeten

on
current accounte or 10ff eB ln t, ime clepoeite at tbe.rnFffgnt.

r
,A14.F.f,,.sourse" the blgger t,he lnetltutlon, the motrc,.volurns

.9f bgelne.eg, . ts takgn up end, ,therefore they cari affor:;d r to
cher.ge lese on the loan intereet encl perhape DeX, :a,., l.lt Ie
,b,lt Storr , o:r .: the deppqlt lntere$t rates , as . eompelled to a
S,4B;f ler Uet.ttution r,rhlch doee
not have the Elae or,,.the
Po-lYpr,.of the qeplla1 or ..the. volume that we gpeah. f6rf,,.rrHu.
SPeakg1.
5.i
f"'
UAT,IWAT _ 3 l'lav 11, ,' 1999
: I .'t,.tii::.
REP. ESPINA- Nc_rrnra]-ly.
Mr. Spee.ker" that ehould really
be the caee. Norural Iy that ehould reallv be the caee, and
that is why when I clteci the o+I prlcine you. wlII . .\r,.
,*,,
, . i. {i,'.^ ,.i
.l:t ..:
o
: :rr|
Cejes-3 fl' May11,1999 o:15 p.m.
REP EsPlNA. ... the oir pricing, you wiil notice that ptron shoutd be abre
to give a lesser price for their gasorine, and maybe cartex

a ritde bit more because
they are smaller, and yet. you go to the gasorine stations, cartex, petron ano
shel[ parehas ang presyo. so, it is not necessarily arways true that the size of a
business institution affects to some extent the pricing of their products,

or in the
case of banks, it is not necessarily true that the size affects.
Because if you rook
at the bank rates, even in the newspapers today, security Bank is smailer than
Metrobank. and yet iyong kanilang interest is armost the same. so, parang,
although seemingry there is supposed to be a competition,

but actuaily iyon din
ang mga interest rates nila, halos parehas.
REP. I.AUREL. Mr. Speaker, Genfleman from Billran, this

Representalion
would like to assure the Genileman from Biliran that there is

no cartel among the
banking institutions..
REP. ESPINA I refuse to use the word ,,cartcl "
REP. LAUREL This I know by experience, Mr. Speaker,

As I said, I was
a member of the Board of the Bankers' Association of the philippines for three
years. rwas arso vice-president of the Rurar Bankers'Association for also three
years, and never did I find a situation
where the banking sy$tem, whether they are
the rural banks or the commerciar banks agree
to pay so ritfle to the depositors or
charging so much to fforl the borrowers.

There is reaily a rot of competition
going on, Mr. Speaker.
l/) 00c5tj
/h
Cejes-3 i \
is
May11,1999
ii
I
.' f,
REP. ESPINA. Well, l, you know, it is nice to hear that there is no
t
collusion among banking institutions and that there is no cartel by the banking
institutions in terms of their rate of interest both on aeposits and on. the loans fi
borrowed from them. il

F:i
1-':i
Anyway, Mr. Speaker, the Majority Floor l.eacJer said I had been on the lx
(r
H
floor for about two hotrrs. anrr I am concernecl abort the areas I brought up in this
tr
iil
H
f-i
fr
inhoduce an amendment to retain the 15% because I have [aj historical claim to :
il:
fl
l:;
it. I was the one who inhoduced it on the floor and had led the debates with the
sponsor of the universal Banking Law, and not precisely bec-ause of historical
reason but because of my belief that we should, as much as possible, close the
. ... i"1l'1
doorto any possibility of manipulation of the economv by very.few, very rich
'.. :iii;\
vocabulary. The word "taipan" dramatizes very few people controlling blg
alsq the worry of many smail businessmen who cannot compete with
big gianh,
Mr; Speaker.
so, maybe during the period of amendments this Representation

wil.
present some amendments, I wish to thank
the honorabre sponsor for ailo,ving
this Represenhrion from the smail isrand of Biriran
to share his thoughb on this
very! very fundamentar measure in the hope
that somehow when the period
2
0ci57
'.r ,'i
00Cbti
t:\
{,r
REGODON.3 Mfly 11, 1999
REP. ESPIM. .. . duringtre period of amendmenb. Thankyou, Mr.
Spaker.
, .,., : THE DEPUTY Spe4KER.,(Rep. Gullas). .{[gnk you, diotingUqhed
Eulleryt6 from the Lone Diirtictof Bilhan, the HonorableGerry Eeoina. . i:.
DisUnguslhed Deputy MaJofty Leader, the Honorable Gilbert'Teodoro.
REP, GUNIGUNDO. Mr. Speaker.
SUSPENSION OF SESSION
THE DEPUTY SPEAKER (Rep. Guilas). Session
Itwas 6:20 p.m.
.
At 6:23 p.m.,lbe scssion was resumed-
THE DEPIJWSPEAKER (Rep. Gullas); Session is resumd.
DistinguiShed Maiority Leader,'the Honorable Mar Ronas.
ri./irl;t
,r:,JiJt
ll
':
REGODON.3 lfryll l ooo 6Jpp.n"
.'rl,:
The Chair no,y rcogniros our distinguished colleague ftom lhii"Cbn
Dlstsict of Valenzuela, the Honoratrle Gunigundo, to beein his interpellalion.
REP. GUNIGUNDO. Thankyou, Mr. Speaker.
May we know fiom the dlsringulshed Sponsor lf he is wililng b sdlt gcced
interpellations from this Represenffiion? ,:.i
THE DEPUTY SPEAKER (Rep. Gu[as). The disringutshd Spoixsor day
yield if he so desires.
REP. ISUREL. Mr. Speakr, I shail b6 htghly honored lf the Gsfflman

f
from valenzuela will continue witr the interpellation. Horever, we $ould like to
rquest the permission of the Genlleman fiom Valenzuela so that this
Represerilathn wlll be abl b thank the congressman from Blllran for the very
healthy lnteraction lhis #moon, and vye are very pleased that he gav6 us very
Intelligent quesidons.
This Genfleman is nonr ready to acceil intsrpellations ftom tn Genteman
from Valenzuela.
THE DEPUW SPEAKER (Rep. Gullas). Our distinguished coflsague, thc
Honorable Gunlgundo, may novy proceed with his interpellation.

o REP. GUNXSUNDO. Thank you, Mr. Speaker. Thank you, dMrryuiahed
Sponsorfiomtrreprovinceof Batangas. .. rcA,

gp_
OOCGO
*7 J&t
{,\
,i..
.
DOMINGO.3 May li, 1999 6:t5p.M.

(P.O, - DEPUW SPEAKER GULLAS)
REP GUNIGUNDO. ...province of Batangas. Mr. Speaker, your

flgpor, I
have here rgth me a copy of'a pamphret handed dov/n by the Bsp
Governor -
"Philippines sustaining the Recovery'', dated
January 1999. And on pages.s4,.b5
ahd 56 of this particutar pamphlet, there is a long list of comments

from several
independent anarysts congraturating the Bangko
sentrar of the phirippines for its
prudential management and issuance of prudentiar norms, guiderine-s,,and
measures in order to avoid being contaminated with the

Asian financiar turmoir.
May we know from u'e drstinguished sponsor
if he agrees with the comfirent$ of
Mark Michelle camdessus, the Managing Direc,tor of the Internationa Mbnetaiy

Fund, the Independent Economic Anarysis of the
Asian Regionar Markets, dated
January 12, 1999; the Menill Lynch Group of Companies, the Forbes.Global
Business'and Finance Magazine, the credit swiss First

Boston, and ABN AMRU,
and ffnalry, Mrr paur Handrey and Deborah orr

of the magazirle Instittrtionhl-
Investor, [of the] August 199g issue.
REP LAUREL. Mr. speaker, Genfleman from varenzuela,

this
Representation was arso given a copy of that pamphret
However, we are g.uilff of
not readlng the pamphfet and we really
do not know the contents:. FlOfvWer,
lf in
general, the qr,restion is whether
the Governor of the centrar Bank has
done hrs
job werr, this Representation
can onry refer to the crisis period of:lggg,
wtrere
according to news reports twenty-two
(22) banks were crosed in 199g.
one of
thern was a commercial bank, fifteen
(1S) were rural banks ahd six (6)jthln
banks.
rI we took at the records excluding
the rural banks, because, Mr. Speaker.
0c{'rii
.i.
:-:,,
. .:
r
f\
:,:-: r ::.
ii,:;. r DOMINGO. S May 11,1999 6:25P.M.
+.j .
Gentleman frorn varenzuera, the rurar banks are normaily mom and pop
:,. l 'jl
organizations, rather I am saying they are
smail institutions. of the failed banks in
1998, the resources representing the farted banks

onry amounted to o.37% of tne
:
whore banking system. perhaps with this

report, this Representation can agree
-l
that the Central Bank Governor did his homework
well.
REP. GUNIGUNDO. Thank you, Mr. Speaker,

thank you, your Honor. My
next guestion is this, This Representation
firmry berieves in the principre that .if
it
ain't broke, why fix it'. The Bangko sentrar of the philippines
issued ail of these
sound prudential measures, grridelines and policies rrncler
Republic Act No.3S7
as amended by Batas panrbansa Blg. 61. lf they were that good in
lhielding.,./mvd
:',,t. tia.
00fu2
,
I
Mlluna May 11, 1999 6:30 p.m.
(P.O. - Deputy Speaker Guilas)
REP. GUNIGUNDO ,in shieldinq the hanking sec.tor, the banking

industry from the regional crisis that has contaminated
almost all of our Asian
neighbors, why do wd need to amend the ord Generar
Banking Ac,t, as amended
an old law that'really needs to improve or to grow with the

times.
from varenzuera wirr recail, oirr committee

on Banks put in 21 trours or wo* pius
l;Efil
Mlluna i' .) May 11, 199e
r rri
Speaker - Genfleman from Valenzuefa

feels very strongly that this bill has
been
thoroughly studied by all sectors.
for a new law, Gentleman from Valenzuela

and Mr. Speaker. . ,,
REP. GUNIGUNDO. Thank you, Mr. Speaker; thank

you, your Honor.
, During the cburse of the interpeilations

of the Genileman trom gitiran, the
distinguished sponsor mentioned at reast 14

sarient features ot the proposea
General Banklng Act and definitery at of the sarient features are designed,to:
l
enhance the supervisory and enforcement
powers of the Bangko $enlr', of thei
Philippines' to improve prudentiar standards
for the banking systm, turther
enhance the competitiveness of the banking sector, further enhance the'
independence of the Bangko sentrar
of the phirippines and to enhancethe qbirity.
of the Bangko Senkal of ihe philippines

to deal with threats, to the gverall gfabUity
oc{.'tt.r
LEDESIIA.3 May 11, 1999 E:36 p,m.
Banks and Financial tntermdiaries that would further strengrttren

lfie benling eyvb-m of
is very happy that that question was asked. your committee

on Banr6, mr. spe*cr, u
now considering revloning not only the charter of the central Bank, yotrr
commltbe is
also, considering review{ng the Land Bank charter, the pDlC charter,. tre Rurd efik
charter,'the Thrift Banks charter, the Development Bank chafter.
Th6e ars$erFfdlB
of your committee, Mr. Speaker, Genfleman from Valenzuela.
REP. GUNIGUNDo. I am parficurarry interested with the stahrs of tt rFrv

.'-i
central Bank Act, is it stiil pending with ths commitbe on Banlq and Flnarxial
lntermediaries or has it alread been reported out by the committee, wtrlch you
*ry
lead, Your,Hono
until he ne'y gov.rnor ls ins,brbd, because an)rway your oommilhe ,*rh.o thd it
cannotiapprove in ume, before the session adjourns,
this padicdar,bilrb6dalr$.,ft has
to go through turc other commitees, the committee
on ways and ,ucans a," .hE
commit'ee on Appropriatons, because the
two main rqusts wilt be drectng tre tnon,6
-{lc'
0Clrtiij
n2n7
LEDESMA.3
rr May 11, 199e 6:35p.m.
committes. That is why we decided to wait until after

the adjoummed cf fris patbr&r
period.
REP. GUNIGUNDO. And, Mr. Speaker, your Honor, do yon find t6 tr!
proposed measuros - the first one which is pendlng in the commlhea oI1 Banb atd
this proposed Generar Banking Act - as cruciar in sustarnrng

trs sourd pn dorilhl
lmesurss and norms that are pr.esenfly
in place so that we can oorns out af t{6
flnancial sisls ahead of our other Asian neighbors?
REP. LAUREL. Mr. SpEaker, Genfleman ftom Valenzuela,

b be wry honos(
this Repreeenffiion has nd had th tme b read the new charbr as propced h the
hands of the commltbE on Banks. we are saddred by anofrrer priority mmre wtrich
is the sscurities Act in the commifree and therefore, our attenton
is ooncerffid on the
tuvo pdority bills atfte moment.
REP. GUNIGUNDO. Mr. Speaker, your Honor, when you

eay priortty bl$s, docs
this mean that this pnrticuhr measure is a certfid adminisfration preidenrt
bHl by the
"'REp. LAUREL. yes, Mr. Speaker, cnfleman fom Vabreuda. h@ rhe

thiee bitls mentionod are certified but it is almo$ physlcally
impocsble br us o incft.lde
the General Banking Act.
REP. GUNIGUND. May we kno,lr, Mr. Speaker, wtren

did $e PrqHSg:pettry
these bills as prlority adminishation measures?
REP. LAUREL. lf not mistaken, Mr. Speaker,

Gen{eman trom Valenzueh...H/r,f
sl/lt
'l
)
'
00{:Litj
n?n
cJAeuitar-3 f) May 11, lsgg
(PO - Deputy Speaker Gul]ae)
REP. LAUREL Gentleman fr.om Valenzuela,

this .was:
certif ied to . even before the
organization of the Corpml,.trLee
on Banks.. Tf the Genf leman fri:m
Valenzuef a wi -1.I r.eca.lL,. o{1g .
of the 1"Ft com.mittees oranized
by the Houee rqA6. the
Cornrnitte_e on Banlrs - Anrl we
were rather late, and .t"hl8,
tS
the reason. why we hacl to wor.k
o_iertine. Mr. Speakef,,
Gentleman frrrni Vaf enzuelar.,
l.rtjt'. GUNIGUNDtt. we11, th j
s Replescntatlon Is aware
that the Lronimittee c,tr Banlre and j.nan,--r
F i a l. -[ntermedlarlee wae ,
One of the last crlnui t_.t ees

that raras lrrFanl.zed under the
Eleventh Congress. And nray v,,e know
when r,ras thi-s. eorunittee
that you ably leard oran-i red.i
REP- LAUREI. If
I AM NOt m j.stallen, Mr.
^.. Speakero
Gent]ernan from VaLenzuela.
i_t wag Sonteli.nlr. Decenber..
REP " GUNIGUNDO. We_l 1 , your Honon, 1f ir
Mr . F,lpealrer..
was only organized last December
of 19gB, the 6p61rinC of thq.
Eleventh Congress was last July
22, l9g8. although J. an
aware thg! the .. Comnrittee r',,
on Banks rla.t l'. *^__, -
rntermedlaries wa6 ."-";;;.;
o later,
."ru"'r" ;::..:: rr::r:ff:
we know what io the rea.son
Dray
w]rv i i. +^^L .Fr..^ !
monthe.bgfpre'19 House teadershir,
-,"- :;itrrtt::_:;t, T:: ,
Comrnittee on Bgnks and
Financial fntermedirnieq
^^-^.,_ -,
that we harle three adminisrratr."
n"r.";:" ,..r;"."T::t:::
4'/
. page 1
A0t:ti/
cJAenrilar - it {' 1 Mni' 11, 1S199
cruc.ial. jn sustalning the econontir: vi alri Ii.tg

and
recoverlt of the banking ,ieetop of 1n1 l(_-6rrrtpv.:
REP. LAUREL. Mr-. Sp,o:aker . Ge n i: j enrq rr fr. cn
this Represertbatiolr j. r: llLl Ir Fo inq 1.1\ l-rr ai:rle
reagon for the de lay. I e rhal.s thr l*:E.Jer,lhirr
reag{.ln.
REp. GUNIGUND0. Well , thanli you, !{,.11. , t et me refer

bach to this particular parnphlet which I have b""r, q,rotirrg,l.
from and whlch I know and that you admi t that ," t'.
uo,, h..r.,
copy of, slnee almoet erlf Congresnmerr. almost ,'or" "
a1f of
colleagues. or probably alL of orrr. l,-olleagues
recei-ved a
copy 6f thls particular clocument- Anrl based on theee
proposed le8islative actions of the
Bangko sentral of irre .
Phillpt'inee, let me quote page 46 thereof" It etate.

h*r.fi
-'In addition
.:
to aII these, there is still need to d.*pln :
further banking reforne and strengthen t:he abitity of

the
gbl'
T)-11 ro supervise the banking systenl and to effectively
concluct 'hronetary policy through approprlate
amendmentB to
the General Banking Ar:t which was eltaL_:ted
50 yeara ago and
th new Centrel Banir Act.,-
According to you, Mr. Speaker.. your ,,new
Honor, the
centiar Bank Act charter ie stilL pending
with the committee,
on Banks and Financiar rntermediarle6,
whire we arer no*
deliberating on the proposed General
Bankine Act. Should we
not wait for the cornmlttee report
on the Central Bank.Acf ,eo
that we can harrnonize these two proposed
rneagures so that we
Page 2
0,1r. t;d
r /\
C.TAgu11.. - 3 {: t{a1' 1 .
1 19"q.? 6:40 p.ur.
can betterl 'understAn,l irow thesb two .measuree wi.1,.1. be ueed by

our banklng officials and Bo that our colleaguee. coul-d
better understand the lnterplay of the Bangko Sentral
tl
of the
Philippines arid the banking sector? i.
REP' LAUREL' Mr-' speaker, Gentrernan from vatrenzuela,
the Central Bank Act ls rather new- It, was amended in 1gg3-
so that it is not necesary for us tcr "cohs:ic*er both.bil1.e
at
the same tlme. in. other words, the GeneFE.t Bankln8 Act
can
stand by itseff, although or elren i,f :lolhe of the penal.blee
covered by the . -. ,/cia
q/
:.,i Pa6a ?
001 riri
l;' l /.i)
Ansula - 3 May 11, 19gg 6:45 p.m.
{PO, DEPUTySPEAKDR GTTLIAS}
REP. LAUREL. ..,coverer{ by the acts under fire Genef,al Banlcing

'..]
Act are iaclicated also in the Central Bank Act.
REP. GUNIGUNDO. Mt. Speaker, your Hotrot, my predlcnrfreat

here is this because we are deliberating on the General Banking Act
-
measure arrd we urill go tft'o'gh the co'tse of seconc{ rs6.ring and t!fud
reading atrd, of c()rlrce, h,rfirrr- rx,e tear.rr :,t-r:,rnrl reading we will he
introducing committee ancl qxlivr.rl u al amencltrcnts, My wofry is tiat we

rnight not be alrle to introdrrr;e amendments that should be included. ir,
the Generol S^-U*g Act rr;hett those arlendrraetrts carro.e up or:l_y qrher+ .
'rte dre trow cleliberating on ttre cetrtral Barrk Act. It would he

counterproductive arrd it might flirther complicate the intentiorr of out
Chitr,bet to rfuengtherr str{ ernhatice the srpenri*ory nflil enforcernent
powera of the BSP, to improve tJre prudentiar stantlards of ttre bankiid
General Banking Act cair stand alone. It need not be taken uB',,
cimultaneously qrith the rerrie,qr of the Central
Bank Act,
REP. GUMGUNDO. Oiray. Lct iue, your Honor, go on
Mr, Spea_ket,
to another poiat, May we loeow, Mr, Speaker, your
Honor, what ie tl.e
tole of the Erangko sentral ng pilipinas
in. the philippine ba*king rystemr
0Cl'?0 djr
'
May 11, 1999 6;45 p,m.
, -REf. C..IJIIIGUJ'IDCr., Mrr., Speaker, yoiit }ionot, ig 'he BSp the

independent :noaetaqr authority that is bb:rg'referred to ia sJlUolr'fo,
riupefliisioti undet*r-akeii liy 'rire Bangleo setiitnl ng pllipinas? ivttut

I
actions do they,.'ndertake to discharge their constitr,tio,".r *.oa.t"i
,,i.IREP.i;Iit\ltLREt. WeIl, the Central Ba$* supereire8 Ure
*ith banking'measures tlrat are hanc{ed riown bv t}re Baagko sor*i rig
central Barrk requires ilrat the banking instit'tions are a*dited

by tre
exotrinets of the Gentral Bank once a veai. At the same ti&e,
tJte
l1 .{-l
Ansula -3 May 11, 1999 6:45 p.m.
seneral Bar*ing Act requiles +.hat the

cifferen+" h*nking inetitutions
must hire an external auditor. At the snrne
time,.../ala
ACi'j'/
fr \ il
Bonprlto - ! Mny ll, 1999
(PO - Deputy Speaker Guilas)
REP. LAUREL. .. At the same time, the dlfferent bar{drg
institrtions especialty he commercial banks and ffnift banks are

required to have an Inlernal auditor" So in effact, Mr. $peakbr,
GenUeman from Valerauela. three bodies are auditng h6 dfierent
banldng instfulions.
REP. GUNIGU'NDO. $o; 'wlrere does he pDlC come in _ he

' :: I]
Phllippine Deposit Insurance company? ls tris a govemnrent agency
,,,fiat $te Bangko Sentral ng pl$pinas superVses over? ls lt mdertra
firisdolion of frre BSP or is uris an independont instifulion hat contfrcb
represented in rre board of he pDrc. And for me rnronneton of fre

Gentleman from valeruuela, tris is anoher charter
hat we are IntendrE
'to,reMew. In fact a{y tris afternoon, we met wih he president of he
00(.r'./ii
,fl.
. 1: j:
Borgrrtto - 3
REP. LAUREL. All right, Mr. Speaker, Gen0eman

frorn
Valenzuela, bne of he areas *rat has been addressed by he new
General Banking Act bilt is tre rrassal corp principre for
effecffve banking
zupewision. This is an organiza-tion of about
15 emergilrq markbt
counbies frat meet regndarfy in sniEertand.
And trrough fre years, hey
s-'-'-
: '--'.
have been actdres.ing effective banking supeMsron
reqr-drements;
''licensing, sb'ncfure, regurations, methods of supervision, infornnson
requlrements, brmal power. of supeMsion, as well as cross-border
, pa4ldng- And we wou' riki tri be abre to share and benefrt from he
''{' studies made by,tre drfferent centrar
Bank govemors of he group of 10 .
counhies. And tris is one of the more important

areas addres60d by
Sris House bill, Mr. Speaker, Genfleman
from Valeruuela.
REp' .UNTGUNDO. tam not too sure about

flre pronnora[on rf
it is '\assar" or \a1". Because according ro one
of my reearce
persons:thaf I consufted in the pieparation
for my tnterpetafions, he
pronounced it as \ar" and not'!assar,'. I think it is a French tenn. And,
rny reeource person happens
to be a Master of Economlcs gnadlate
.
;l
Boqgrlto - 3
May tl, 1999 6:50 prn
REP' LAUREL. For ilre information of the Gantrnan

frorn
valenzuela, Mr. speaker, both pronunciations
are coreot ,,vaf,'ard
yassef'.
REp. GUNTGUNDO. Okay, I willnot have

any quanelvdh hat.
Let me go back again to tfre original queslion because

)lour
ansu'er seem6 to digress from the question originafiy propounded.
I am.
rafenlng to tre prudenlialnorms...
!/
00r''zii
$. \ il
BRACIA-3 Mav I l. l99tl 6:55 p.m.
(PO-Depuh' Speaker Gullas

)
REP. GLINIG{INDO. ... pnrdential

nornrs that are in place to ensure
sound banking practices like for exanrplc capital-to-risk-asset ratio.

provision fpr loan losses, general provisioning,
loan ceiling expos$re limits;
fbreign exchange position. fue rhese
the norrns. rhe prudential norms,t'dt
are.;now in place which rve can identi$ as fhe

nraior factors in our good
a
financial standing, reratively speaking,
with trre Asiar counterparts? I am
already spoon-feeding you with thd
answer.
R-EP. LAUREL. The Gentleman from Valenzuela

is correct Mr.
speaker' That is one of the bigger and more
important crassification ofth,
highlights of the bili.
REP G(INIGLIND'. I have ranled off five prudentiar

norms that the
Bangko Sentral :ng, pilipinas has put
in place to eusure sound banking
.; ..
practices.
My nefi,question is this which I will not give you the answer. To

what exterit do these existing'prudentiar
measuies on the philippine bankinc
s,ystem conlbrm with international

standards?
REP LATTREL' Mr. speaker, Gentreman

fi.om valenzuer4 that
preeisely the proposal, to
conform with international standards.
AAt'"lj
' 0295$
fl
BRACIA.3 May I l. 1999 6:55 p.m.
REP. GUNIGUNID0 fue we saving that the five prudentiar

norms
that I rattled off are below pa1, b.elow the intemationul stand.its that the
vassal organization has recommended to all of its member governors?
RIP. LAUREL perhaps the better way to describe i1 Mr. Speaker,
Gentleman f-rom valenzuela, is. we are improving the present

sefup because
.::. '
we want to globalize our systems so that we can conrpere
internationaily.
REP. GUNIGUNDO. Can you please pinpoint from the 102 or 103
provisions of the proposed General Banking Act rvhich

measures or which
pror'isions conform to international banking standardsr,so,that I can be
educated.
SUSPENSION OIi SESSION

J'.,:.
REP. LAUREL. Mr. Speaker. mav I ask lbr one minute Suspension.
THE DEPUTY SPEAKER (Rep. Gullas). Session is suspended for

.::'
one minute.
. .);
It tuas 6: JB p.m.
OCIr 'z'/
CABANOS - 4 May11,1999 7:00 p.m.
,: .
!,-..
(PO - Deputy $peaker Guilas) .-
THE DEPUry SPEAKER (Rep. Gullas). Session

i$ resumed.
REP' LAUREL' Mr' Spiraker, in answer to the question

of the Genteman
from Vilenzuefa, the prudential srandards
referred to are, Section 62, S*tion 63
: :: : :
$ections 65, 66, 69, 80, 81,
REP. GUNIGUNDO. Let us proceed, Mr.
Speaker, your Honor, to Section
62 of House Biil No. 6g14, states here that "The Monetary Board,shail eshbrish
criteria for ieviewing mijor acquisitions or investments

by a bank and ensuring '
that corporate affiriations or shuctures do not expose '

the bank to undue ristrs in
any way hinder efiectivesupervision." rs this
the originar version of jJouse ftill No" ,.
.
6814 or has this been amended by the committee

before it was,reporred,o*t in,,..
plenary?
' REF'' LAt REL. Mr. speiker, Genreman from Varenzuera, 'r
this is not part
of the original bitt' Thii uas ariopted by the committee, Mr. speaker,
Genfleman"
particular provision conform

to internationar banking standards,
vib-i:Vlu ,.,,
the
present banHing policies
arid practice? rs this particurar provision
conhined arso
:j I':636'rt/s
CABANOS-4 fI May 11, 1999
7:00 p.m.
REP. LAUREL. Mr. Speaker, Genfleman from

Valenzuela, as tye
merilioned earlier, the Generar Banking Act
is a S0-year ord raw and through the
years there has been changes in the banking
system, rike we did not have
universal banks in the past, so we have given
- increased powers to a banking
instiMion, allow them to invest in allied and non_allied
underbkings., And ;
lherefore to ensure that the Monetary Board can

scrutinize the different banrtifig .
instihrtions and that they do not circumvent existing

regurations rike the DosRl
limitations, your committee frt that this section

shourd be incruded in the New
REP. GUNIGUNDO. This provision mentions the

Monetary Board, is this
agency independent from
organization?
REP. LAUREL. The Monetary Board is part of the Bangko

$entral ng
Pilipinas, Mr. Speaker.
REP. GUNIGUNDO. And may we know what is the composition

of lhp,. ,
Monetary Board?
REP, LAUREL. Mr. Speaker, Genfleman from

Valenzuela, the compo.sition
.../atc
, l
1v
{
.00i '7t,
,n.Er\^.
i'l,4ii
ffi
Mav'11, 1999
nEp. lnUnel. . Genfleman from Valenzuela, the composition

of lhe
,y,\,,!'k'y sarq is a seven
Monetary EBoard se, membership pppointed by the president of the
Qf thr
Philippines with a term of six years. The Governor of Banoko
Bangko senrral
Sentral i<
is
chairman cif the Mon'etary Board, a member of the cabinet is arso designaibd
by
coming from the private sector, do these peopre

need to possess any certain
qualification in order to be appointed as member Erf the Monetary Board?
Because, to my mind, the Monetary Board prays an
essentiar rore in'the discharge
Fhilippines
REP. LAUREL, Mr. Speaker, Genileman fronr y31s62urla,

Section E,
Qualiflcations, the members of the rr4onetary Board

must be naturar-born cifizens
of the Philippines, at rehst 35 years ord, with
the exception of the governor who
congressionar, or guberhatoriar candidate

in the'May 1 1 , l ggg elections to appry
for an appointment as a member
of the Monetary Board. ls that correct,
Mr.
Speaker, your Honor?
00i 80
lr'
ii
1
SANTOS - 4
agent or stockholder of any barrk. quasi

bank or anv other institution which
is
subject to supervision or examination
by the Barroko sentrar, in which case.
such
member shall resiin:lrorii and c,ivest himself
of .,any anc{ all interests in
suctr
institurion before assumption of office
as mernbdT bf the Monetary Board. The
members of the Monetary Board. coming
from the private sector, shalr not hord .,:
any other public office or public,employment
during their tenure. No persofi
shall be a member of the'Monetary
Board if he has been directlywith
"onn"J"d :r::i . . .
any multilateral banking or financiar institution
or has a substantiar interest in'any
private bank in rhe philippines
within one year prior to his appointment.
LikeWise
no member of the Monetary Board
shall be employed in any such institution
w*hin
two years after the expiration of his
term except when he serves as an
offlcldl.,,
representative of the phirippine
government to such institution. perhaps ,,
rhe
enumeration by the Gentleman
from .Valenzuela, of those politicidhii,,ale
not
disqualified . .
. ltl
, "
'll
00, 8]i
i,
May 11, 1g9g 7:10 p.n.
DEPLTTY SPEAKER GULLAS)
REP. tAUREt: _ - _ ar not d.iequa.lified.

REP - GUNIGUNDO. Thank you. So, I was Just wonder itrg
what would be the anEwer becauee tonorrow
18 the expbatlor.
of the one-year ban for all loelng candldatcB ln the
nat l-onal. electlons of 11, 1gg8.
May
Let ne again .aek you, your Honor, what ie the orlglnal
verBlon of Section 62? I ju8t read a few minutes
aEo the
exletlng connLttee. veraion, what ie the origlnel
r rt rrrqr veralon
v El_.' J.gIt 60.
that we can dletlngulsh if thle version is a uruch beLt
verion than the original vereion.
Mr. Speakef, your Honor, before the dietlneu.lehed
Spbneor reacta to my query, may we know, Hr.
Speelrej, .tf,, we
et1ll have enougtr col,leaguee to llsten to my querlee,
becaueeI et,1l1 have, I thlnk 3O or b0 questlons more on the
General Banklng Act whlch . I flnd to be vel:y, .
ve.ry
elgnlflcant ana afl my colleaguee ehould be preaent, in
order
to underetand the eignlfrcance of thle hlstorlc meaeur.e
that
we are dellberatlng c,n.
REP- ROXAS. Mr,. Speaker.
THE DEpLrfy SPEAKER (Rep" 6q11""y. The MaJority Leader.
5USPENSION OF CONSIDERATION
OF H.B. . NO. 6814
fn vi_ew of the remark of the Gentleman
from Valenzuela" nay .l aek that we
tenporarlly auspend
eonelderation of the extant measure-
Iso
Speeker::
fr.,1 i ) L,vt, a /_l l,/
:'
BRACIA-2 May 12" 1999 5:50 p.m.
(P0-Deputy Speaker Fuentes)
REP. GONZALES G'{.). ... I move thar we refer rhe speech of the
Gentleman from Quezon Provi'ce, together rvith all the interpellations, to

':
the Committee on Foreign Affairs. i so move, Madam Speaker,
\'
THE DEPUTY SPEAKER (Rep. Fuentes). Is rhere any objeotion to .
that motion? (silence) The Chair hears none; the nrotion is canied.
REP. GONZALES (l't ). Madam Speaker. { .move that we now
proceed to consider the Calendar of the Llnfinished l,|usiness.
'fI{Fl DEPLI'Y SPEnf,F]R (l{ep. Fuentes). An1,

objection? (Siknce)
The Chails rrone: the mcrtion rs carricd.
CONSIDERATION Oir H.B. NO,6814

Cotttiiruation
Period ofSponsorship and Debate
REP. GONZALES (N.). Madam Speakcr, I now move that we

consider cornmittee Report No. 206 on House Bill No. 6g14, submitted by
the committee on Banks and Financial Intermediaries. For which reason I
ask that the secretary Generar be directed to read only the

tifle ofthe bill.
THE DEPUTY SPEAKER (Rep. Fuentes). The Secretary

General is
directed to read the title of Committee Reporr No. 206.
THE SECRETARY GENERAL . House Bill No.

6814, entitled: .,AJ.l
AC'PROVIDING FOR THE REGULATION OF TIIE
ORGANIZATION
ofi,57 +
4?fr'o7
,r
il {,
;J
ril
it BRACiA-2 lvlav 12. | 99!) 5:50 p.m.
fi
I
o AND OPERATIONS Otr BANKS.
QtJAS|.BANKS
ENTTIIES AND FOR O'|FIF.R PI]RPOS!,S]'
AND TRUST
RflP. GONZAI_ES (ll.). Maclam speaker. to contrnue sponsorship of

the measnre I ask'for the recog'ition of the distinguished Gentleman from
Batangas, the chairrna' of the sponsorirrg committee, the Honorable
Macado Laurel IV.
THE DEPLIy SpIiAKER (Rep. Fuentes). The distinguished

Gentlelnan from Batangas, the Honorable Macario Laurel,
may now have
the floor.
SUSPENSIO}I OF SESSION
o REP. GONZALES (N.). Madam Speaker, may I just move for a one_
minute suspension.
THE DEPtnY SPEAKER {Rep. Fuentes). Session

is suspended for
one rnin ulc.
It was S: 5I p.m.
At 5:53 p.m.. the session was resumed.
THE DEPUTY SPEAKER (Rep. Fuenres).

The sdssion is resumed.
REP. GONZALES (N.). Madam Speaker, the parliamentary

status of
the bill is that we are sti' in the period of interpellation. To
continue with
rl'j'tiil
a2g5
a
dl 'r
BRACIA.2 May 12. 1999 5:50 p.m.
his interpellation I ask for the recognition of the Gentleman

from varenzuera.
the Honorable Gunigundo.
THE DEpUTy SPEAKER (Rep. Fuenres)_ The Honorable
Gunigundo' the distinguished Gentleman from valenzuela,

may now have
the floor.
REP. GUNIGUNDO. Thank you, Madam Speaker.

Thank you, your
Honor.
Yesterday \r'e were discussing the prudentiar norms that

are in place
that could bo the reasons why our country has

been able to insurate itserf
o from the currency crisis i'the A.siarr region. And the distinguished sponsor
has identified certain sections of the proposed lneasure, specifically

Sections 62. 63, 65. 66. 69. 8(). and gl as tlrose provisions that would
firrther slrengthen ancr enhance the supervisory and

reguratory functions of
t'e Bangko senlrar ng piri'inas. Ancl we r,vere criscussing

in particular
section 62. and I already rearr into the recoras
1'e provrsion of section 62, I
rvas asking the disturguishr:d sponso'.

MacJam speaker, what was the
original version of ...
n,1
ut9"r I
cABANos - 2 {'')
May 12, 1999 r5:55 p.m.
(PO - Deputy Speaker.Fuentes)
REP, GUNIGUNDO. . . . original version of Section 62. And trat was

where we left off yesterday. so may r know now from
the distinguished sponsor,
Madam speaker, if this committee version is difierent from
the originar rrersion?
And if so, what is the difference between the originar version
and he proposed
committee version?
REP. LAUREL, Madam Speaker, Genfleman from Valenzuefa,

ttris is a
new provision.
REP. GUNfGUNDO ty'y'hen you say new, ctoes this man that this
particular provision is not found in RA 337, as
amended by Bahs pambansa Brg.
61?
REP. LAUREL. That is correct.
REP, GUNIGUNDO. So . . . what lwas referring to, Madam

Speaker, your
Honor, is, the original version of House Biil No. 6g14. Because
I have a copy arso
of the mahix on that prticular House bill . . . oh, what

I mean is, House Bill No.
1160 - House Biil No. 6814 is the committrie version, the
substitute biil. House
Blll No. 1160 has a different wording. And rwourd
like to find out from he
o distinguished $ponsor why did they not adopt

the originar vereion of Houee Blrt
No. 1160 as far as Section,g2,ls,ooncemed?
. REP. LAUREL. Madam Speaker,

Genfleman from Valenzuehi it is
a nerv
provision.
a
..11
d\
ri CABANOS - 2 May 12, 1999
at 5:55 p.m.
fll*
ii REp, cuNrcuNDo. Does this mean now that section 62 in House Bilr
t i
No' 6814 is notfound in House Biil No. 1160? rs that correct, your Honor?
REP. LAUREL. Madam Speaker, Genfleman from Valenzuela,

in this
House Bill No. 6814, this particurar provision is inserted.
n is a new provision. .
REP. GUNIGUNDO. Okay. Let me go on to the next

section, Section 63.
ceiling on lnvestrnenb in certain Assets, is this a new provision,
or is it part or
copied from House Bill No. 1160?
REP. LAUREL. This is not entirery new, Madam speaker, Genuernan

from
Valenzuela. We dele@*somerportions of the old provision.
REP. GUNIGUNEO. okay. what about section 64, Acquisit{on of Real

Estate by way of satisfaction of claims, is this a new provision
as ftr as RA 332
BP 61 and House Bill No. 1160 is concerned?
REP' LAUREL. This particurar provision, Madam speaker, is not

entirely
new.
REP. GUNIGUNDO. May we please be clarified, when we say .not
entirely ned', does this mean that a part of this is found

in M 337, Bp 61 and HB
1160?
REP. LAUREL. In Section 64, Madam Speaker, Genlleman from

Valenzuela .../atc
tr
a
SANTOS .3 May 12,1999
P.O. - Dep. Speaker Fuentes
REP. LAUREL. . from Valenzuela, there has been some limitations on
the acquisition of real propefi. This particular provision now clarifies the portion
that refers to bank claims which is not subject to the ceiling. Because if the
prope!'ty has been turned over to the bank by the borrower as a dacion
en pago,
Itris is what is contemplated in addition to the section, Gentleman from

Valenzuela.
REP. GUN|GUNDO. What about Section 65, [/linimum Capital. ls this a

new provision as far as RA 337, Bp 61 and House Bill No. 1160 is concerned?
REP. LAUREL. This is a new section, Madam Speaker.
REP. cuNrcuNDo May we know what is the intention of this particurar
provision, Section 65, Minirnum Capital.
REP. LAUREL. The nrinimunr capital, Martam Speaker, r,efers to the
different banks-'universar, commerciar, rurar and thrift, to distinguish

one from the
other.
banking institutions to have the same

{,}
SANTOS - 3 May 12,1999
many times more. The reaso' is because of the crrange in the situation in the
country requiring strengiheninq of the clifferent barrking institutions and also
requiring increases in ca pita lizatir:n.
REP. GUNrcuNDo. yes sir. My precricanrent here is that we are giving
the Monetary Board authority to determine the minimrrrn capital for each category
of banks. wouldn't it be better if we just rjrop this pafticular section and just
include this in the new centrar Bank Act that is pending in your committee, your
Honcir, instead of putting it here in the proposed House Bill No. 6g14,
because
this pertains to banks in general and rlhink it would be superfl!.rous for us to

o include this particurar section inasmuch as the Monetary Board is arready
determining, at this point in time, the minimum capital for each category of banks
REP. LAUREL. weil; perhaps it is necessary so that the centrar Bank wirl
have the authority, but if the Gentleman from varenzuera would rike,
at the propet
time that is, to change this and submit an amendment to remove this. this
Representation may be willing to consider this.
REP. GUNIGUNDO. Thank you, your Honor, and thank you,

o Speaker.
Madam
Let me now move to the next section, Section

66, Risk_Based Capital. ls
this a new provision, your Honor, as far as RA
337 and Bp 61 is concerned?
REP. LAUREI-. yes, it is partly new, Madam

Speaker and.Genflemar
from Valenzuela.
REP. GUNIGUNDO. Mav I get an . . .

MALI}iAT - 3 M,arr
l.e t
1?
4a I Oao
6:05p. m.
(PO - DEPUTY SPEAKER FUEN?ES)
REP- GUNIGUNDO.I get an explanatlon from the

Mey
dlgtlnguished $poneor what is the objectlve of thla.r
part,lcular provlelon ae far ae strengthening the supervleory
and regulatory funct l-on of the Bangkc, Sentral of the
Phlllpplnee Le concerned, becauee I am not nuch of a banker,,
not llke the dlgtlngulehed Spongor who has had a career 1n
banking-
REP - - Madam speaker, Gentleman frorr valenzuera.
T,AUREL
the uraln reason in the proposal is to be able to give the

Monet,ary Board flex1bl11ty. Otherwlse, if vre put lnto
1aw
thls particuLar" ratlo, each tlme there . ie a change in
clrc'mstance'' hre may have to go back and amend the law,
So, lt ls rea]ly rnore for flexlblllty.
REP. GUNIGUNDO - May we lrnow, Madam Speaker, your
Honr:r, when we tDean flexiblllty, who iB euppoeed to be
flexlble here, the banks, the Monetary Board or the
cugtomers of banke?
REP. - rlentleman from Valehzuela, th16 ls
LAUREL
o flexlblllty olt the rulea. becauBe clrcunatancsa change
through the years and .t f we. do r:ot al1nw the
Honetary Boerd
to make changes, it wi.Ll be diff icr"rlt to operate.
REP. GUNIGUNDO_ Itrhat about, your
Honor, Sectlon 68, le
this a new provision, Linlt on Loans, Credlt
Accorunodat lone
and Guarantees?
f
t!'' oii ri.i
F,1
I''
MALIWAT - 3 tlay 12, 1g9g 6:05p.n.
REP. LAUREL. IIot entlrely new, Gentlenan fron

Valenzue 1a -
REP. GUNIGUNDO. When we satr, Your Honor, not entlfely
ner./, doe6 th16 mean that we may flnd a slmllar Bectlon 1n
R.A. No- 337 and B.p. Ble- 61?
REP. tAUREt. That is correct, Gentleman from
Valenzuela.
REP. GUNIGUNDO. And what particr-rlar. changes have been
niade on that elnllar Dlovislon of R.A. No. 337 eo that we
can focu6 Dur attentlorr on the changes and not on the entlre
aectlon whlch le quj,te fong?
REF. LAIIREL. The cLrverage, Madam Speaker and Gentleunn
Val-enzuela, the coverage was expanded to tnclude
frrrm
credlt accommodatlons and gna'antees. The llmlt on loane,
credlt, accorulodhtlone anrl gu&ranteeB was lncreaaed frorn 15?i
to 25% of lta courblned ceFit.al accLrunt.B - Aleo, the llmlt on
eddltlonal llabllltlee .is lowered from LE% )ro Loyc. The caeh
recelpts ar"e lncluded aa acceptable securitlee for the
additional l tabil itres.
REP. GUNIGUNDO. Let ua go flret to the first
percentage lnerease. In R.A. No- 3g7, you eaid
that the
limlt is 15li but in Houee 811t No. 6814, 1t hae been
increaeed Lo 2\jt. What ie the reaeon for thle
changc ln thc
I
percentage of .
f\
MALIWAT _ 3 Mav .12, 1.999 6:05p.n.
REP- TAUREL 1., lt elmplv mesns that the bank can

- FfeJ
now lend to a slngl e bor.rc.twet a bigger amount, Gentlenan

from Valenzue1a.
REF. GUNIGUNDO. Would it not be more prudentlal level
lf we just malntain lt at 15% lnstead of 25% because if we
expoae banke to \
o
Cejes-3 {ii' I May 12, 1999 6:for')1
, (PO-DeputySpeakerFuentes)
REP. GUNIGUNDO. ... Because if we expose banks to a higher risk,
then chances are the moment that this materiarizes, the banks
wiil heaviry be hit
by defaulting loans. And if it is just a level of 15% which is, as far as the
congressman who crafted RA 3372 is concerned, 1506 wourd
be the prudential
percentage or ceiling of exposure that can be extended to any person,
partnership, association, corporation or other entity that

wants to receive a loan
portfolio from any banking institution.
REP. LAUREL. Madam Speaker, Genileman from Valenzuela, the matn
target here is to spur economic groMh. The account corporations

now are bigger
than 50 years ago, and they require higher funds or more funds
when they borrow
from banking institutions. And the way the central Bank has
calculated this, the
2506 is not too bad to be able to safisfu bigger boirowers. Because

if a bank is
unabre to raise the necessary funds for their operation from one banking
institution, they may be required to go to another bank for the
additional funds.
and it is more convenient if they onry dear with one banking
institution.
REp GUNTGUNDO. I am just a littre bit worried about this sudden

o Increase in the ceiling of bank xposure, Because at the start of our
interpellations, we were abre to come up with the statement that one of the
reasons.why we were abre to insurate ourserves from the regionar currency crisis
prevairing in our region is that
the Bsp has imposed roan ceiring exposure
rimits
that wourd have prevented banks from overextending
their roan portforios to the
0',1
\
a,
uejes.S
f, l May 12, 1999 6:20i' \.
real estate sector, for example. And if we suddenly jack up this ceiling from 1F%
to 250,6, it might be counter-productive because we arc risking

too much as far as
banks are concerned.
REP. LAUREL. Madam speaker, Gentreman from varuenzuera, for the
information of the Body, this has been practiced as early as .lgg2, and we do not
see any difficulties. As mentioned earlier, Genfleman from Valenzuela, this

is a
new provision. This provision is new in the sense that this has not been
included
in the General Bahking Act or the fifty-year okl General Banking Act. However.
the cenkal Bank has been empowered to practice this ratio as earry as 1g92.
REP. GUNIGUNDO. your Honor, Maclam Speaker, I will no longer argue
with the Gentleman from Batangas regarding that point. Let me just be clarified, I
want to knof/v, Madam speaker, your Honor, what is the definition of a clean loan?
REP. LAUREL. As this Representation knows, a crean roan is a roan thar
has no collateral....
o
f\ 1, I
REGODON.3 May 12, 1999 6:15 p.n
PO - (DEP. SpEAKER FUENTES)
REP. LAUREL. . . . has no coilaleral, although ten years ago wtren lruas
in the banking system, rre also treated loans with chattel mortgages as collaierals,
as "clean loans". But tt slmply means that there ls no real 8tat to secule
tle
loan.
REp. GUNTGIJNDO. So, the definition of a crean roan is

a roan hat has no
sufficient secudty to back up the loan porfolio in case of default on lhe part
of the
bonower. ls that, more or lEes, the. ichnlcal dscripflon or technlcal dflnlflon d
th term "clean loan?
REP. |-AIJREL. ltyladam $peaker, that may be acceptabte.
REP. GUNIGUNDO. So, if there is a clean loan, is there a "dlfty

ban?
REP. LAUREL. The term "diily roan" is nd used in tfie bonking indusfiy,
Gentleman from Valenzuela,
REP. GUN|GUNDO. So, under this pailicular provision (in) Secfion 66

of
House Bill No. 6814, what wourd be the ceiring on crean roans which
banks may
extend to borrourerc?
REP. LAUREL. Madam Speaker, Genileman from Valbmuela, this
Representation is not aware of any ceiling for clean loans.

ln olher lvords, tfie
banking institntion has the authority to lend, clean if they

wish.
REP. GUNIGUNOO. So, in that case, theoretically

speaHng, a bank can
oxtend a cfean loan in the amount commensurate
to the ceiling or E% or he
combrned capltar accounts of the satd
bank to a srngre bonou/er. E nat aonegt,
Madamspeaker,yourHonor? fl
0i)
!"t 1 ,'; :l
a
ftlu,,t
PJGODON-3 May ld 1999 6:15 p.n"
REP. LAUREL. Madam Speaker, yes, GenUsman from

Valemuela, ilqf is
conct. Hoirevr, in anofter sction, there is a proposal to ailovr the monebry
board to put a celllng.
REP. GUNIGUNDO. put a ceiling to where, your Honor?
REP. LAUREL. To loans that are clean.
REP. GUNIGUNDO. Lt me go again to another question that seeks

to
get the definltion of combinod capital accounts. what is the definition, your
Honor, of "combined capital accounts.?
REP. LAUREL. Well, as lrecall, Genfleman from Valenzuela, the capihl
of the bank, he profits of the bank, the funds of the bank that are not commilbd. . .
Ah, here, Madam speaker. 'combined capitar accounts" or net uorth shall
mean the tobl of rhe unimpaired paid-in capltal incruding peid-in surplus,
retained
earnings and undMded profts, net of varuation reserves and other adjusfinents
as
may be required by the Bangko Sentral.
REP. GUNIGUNDO. I think, your Honor, Madam Speaker, you are
quoting from section 3, paragraph (i) of House Bill

No. 6g14. b that concl, your
Honor?
REP. LAUREL. cen'eman ftom Vatenzueta, I

am quofing,?om Soc{on 3,
leter (h).
REP. GUNTGUNDO. Okay, thank you forthat

corrcdon.
My only worry with this particular provision, your

Honor, is hat BSp
sffistlcs vvoufd shovv frat many banks are hit
by defaulted clean loanr, and thls lc
I
ft
Oij 7ri
REGODON- 3 May 12, 1999 5:15 p.m.
one of the reasons why banks go bankrupt. Would the distinguished

Sponsor
yield to amendments . . . /edr cl#r-*
t
DOMINGO - 3 May 12,1999 6:20P.M.
(P.O. - DEPUTY SPEAKER GULLAS)
At this jancurc, the Deputy speaker rerinquished the chah to the Honoroblz
Eduodo Gullos.
REP. GUNTGUNDO. ...yield to amendments at the proper time that wourd
include a provision in this particular section that would authorize

the monehry
board to prescribe a ceiling on clean loans which courd be based on the net
income or net worth of the borower so that we can avoid a situation
where banl
extend up to twenty-five (25%) percent of their combined capitar

accounts to a
single borrower without any colraterar and they wourd be hording on
to an empty
bag later on in case that particurar borrower absconds ' with the money
and
migrates to another country Just like what Mr. Dewey Dy and the other banking
scandals has shown to us in the past?
REP, LAUREL. Madam Speaker - Mr. Speaker, sorry this Represenhtion
did not notice the chirnge. Mr, speaker, this Representation wiil be very happy
to
seriously consider whatever amendments the Gen eman from valenzuela

will
submit at the proper time.
REP. GUNIGUNDO. Thank you, your Honor. Let us go on to

the next
.
section. 'section 69. Restriction on bank exposure to Directors, fficers,
stockholders and their Rerated Interest." rs this a new provision
as far as RA 332
and BP 61 are concerned?
REP. LAUREL.. some portions are new,

Gentreman fromvarenzuera,
REP. GUNIGUNDO. May we know, your

Honor, what porlions are new
that further enhances the prudential
norms that BSp is presenfly pursuing?
n,"i
DOMINGO. S May 12,1999 6:20P.M.
REP. LAUREL. The porrion where DosRr, that is roans to the

- the DosRl
loans was expanded to cover exposure in general. And the DosRl loans limited 4
to an amount equiva,ent to their respective unencumbered deposrts, and book
value of their paid-ir1 capital contribution in the bank. However, non-risk

loans
shall be excluded from such rimit, and there is an exception, Mr. speaker, and
Gentleman from Valenzuela, the cooperative stockhorders of cooperative

banks
are exempted from the DOSR|,.../mvd
o
{t 'l
Mlluna - May 12, 1999 6:25 p.m.
(P.O. - Deputy Speaker Guilas)
REP. LAUREL. ...from the DOSRI.
REP. GUNIGUNDO.' May we know, Mr. Speaker, if the distinguished
Sponsor is finished answering my question?
REP. LAUREL. yes.
REP' cuNlGUNDo. I think section 69 is a very, very significant provision
of this particular House measure and I think this particular section gives teeth to
the policy of the state to prevent directors, officers and other officials of banks to
abus6 their position in wiping out the resources of the bank that they own to the
detriment of the customers of the said bank.
And let me just ask this question, your Honor - Mr. speaker. Instead of
merely making the director or officer who have violated the provisions of the
proposed measure in case it is enacted into law, subject to the pnat provisions
of sections 36 and 37 of R.A. No. 7653, should we not add here a provision that
such bank director or officer must be disqualified on a perpgtual basis in order to
avoid the situation where an erring bank official afier several years, when
most of
the clientele of that bank that has collapsed due ro his mismanagement has
o already forgotten that fiasco, gets again enough capitar and puts
up another bank
and then commits the,same mistake of mismanaging that

new bank?
REP' LAUREL. Mr. speaker - Genteman from Varenzuera,

this proposal
is very well taken. In fact, in another section of
the Generar Banking Act, there is
a
I
Mlluna - May 12, 1999 6:25 p.m.
maximum' Meaning, the executive or the officiar of the bank may be prevented
from exercising his career up to 20 years.
REP. GUNIGUNDO. May we know if rhe distinguished Sponsor is

refening to Section 20 of House Bill No. 6814?
REP. LAUREL. Okay, the Genfleman is correct.
REP. GUNIGUNDO. So, I am glad to hear that the distinguished

Sponsor
is willing to consider my recommendation that instead of a 2O-year
ban, it shourd
be perpetual disqualification L,ecause in cases of .rudges who have been
dismissed by the supreme corrrt for marfeasance and misfeasance, rhey

are
sometimes meted or: most of the time they are meted with perpetual
disqualification from erective or appointive office and banking is a very, very
sensitive industry and perpetuar .disquarification shourd arso aftach as a
o
LEDESMA- 3 \i. May 12, 1999 6:30 p.m.
REP. GUNTGUNDO. ..,attach as a penarty for those

bank officiars and dhec.torc
who have this ailment of abusing their privireges and bensfrb

as ownefs of banks.
Because 20 years is not that long enough period of
time for thess ening bank ofichls
to reform themselves. Because in the case of Monte de piedad
and orient Benk I think
the owner of orient Bank was also involved in a similar banking malpracfrcg
saneral
decades before he eshblished the orient Bank. lf penetual
dlsquallfication $rbuH bo
incfuded in this particular provision, in section 2e and in section @, then that coutd
have been avoided.
REP. LAUREL. Mr'speakerrGendeman from vareruuera, perhaps

rshould ask
for the pardon of the Genileman,ftom valenzuela because I
did not conrinue my rpry.
The good ne'irc was, thls z0-year limihtion rimft was included
in ttre original drafi of tre
bill' But somehor'1, dudng tlre deliberations of $e commitee, this
was remorred. There
is a request for a conslderation from the cntral Bank so that we can relns&
thls
pafiicular section. But before the Genfleman fiom
valenzuela reacb to tris, it may bo
good to mention to this hall, today, that when this Representatotr joined
ihe banklng
system in 1960, the policy then was to look for businessmen
who are ddng rvell in trcir
business, to invite them to become directors of the bank.
Whlr? Bcause tlg bankg
wanted to get the buslness of a director who can provide
deposits and bonor from the
bank.
In this section 69, the Gendeman from varenzuera

wiil probabs notha hrt n
states hat dealings of a bank with any of ib
directors, officErs or stockholders ard 0nlr
related interesb shail be upon terms not
ress favorabre to fte benk than thoee *
&0
n;,
4208
fJ'l! ..i\
LEDESMA. 3 ':' May 12, 1999 6:30 p.m.
others. ln olher unrds, at the moment, there is a change in the si{rndon. lt will be
disadvanhgeous to a big buslnessman to acced an invihtion to beconrc

a slockholder
of a financial instihruon because ffiere are so many restrictions. so, even fre 2Gyear
punishment to a (xlr(f,r banker who may not be entirely at.fault because thls o,fficial
may not be the oilner of the lnstitution. In other words, you have a carg9r banker
working in a banking institution. He is made to believe that tre transac,tion is legitimate.
Earlier, the Gendeman from valenzuela mentioned the orient Bank rhis
Represenhtion has been made to understand by ttre cental Bank that some of the
tansactions in that orient Bank used dummy borowsrs and lherefore, lt mal/be at
times very dltlicult !o dlscover lhat here is a dummy bonower so that the ofilcer signing
or apprwing he transaction may really be innocent. And here ls a man doing

his job
who will be banned from working afler all the experience he has in bonking, der atl the
studies ...teur\,r
t ..\
f;JAguilar - 3 May 12. 1999 vrvv tr'ru.
(P0 - Deputy Speaker (lul Las )
EEP,.*LAU-&EL afte' a]l tlrr: studles for 2O years.

So even this was objr_:61j6n6516 l;n i.l1r-,:nrnmlttee when this
was being illsr:rrsse,l. flnwivFr - aF vjr. t +nr.iOned eaf l1ef , thlS
may I'e i n-ludr.d l,v tl,.-. I-iptrt. lernan ir..:rl Val enzuela a$ong the
itens tliat he rnatr ni.:h to inclrirle in the ierioa of
Arnendrnen i:s .
HEI'. GUNIGUNICT - Tlrank vou. tlt. S1,eaker, your iono*.

My problern with ihi6 F,articu-lar provis i,.:n is that tatthoughl
rnere at'e sometlrnes situatlons whereln. the owners of Bank A
t,atk to the owners of Bank B and the owners of Bank'A tell
the' owner.s' of Bank B. "'We want to qet }oane from you.
Extencl to us the loan and we wlll rec iprocate by extendlne
l-D you loans from our own bank, -- lt circumvention of the
.i
rule on DOSRI . How do we intenti to, Mr. Speaker, your

Honor. how do we lntend to correct that ftaw ln the binklne
system? Because we have the opportunlty rlght now to 8et a
trap or set a wal1 'that would prevent collusi'bn between
olrrlers of banks that try to circumvent the provlelons
on
' REP. LAUREI. That observation,

Mr. Speaker', of the
'Gentlerian ir"om Valenzuela
le very weli taken. In .the..- peet, l
perhaps this was also golng on. There " reaLly 'roere
' feciprocal ioans granted between owners or etockholiiere.
- different of
banking .institutions. However,
A,/
Page 1
nil '(,
CJAFuilar - 3 Ma1' 1;1 , tnt,n 6:35 p.m,
or owner, for that natier, lvill alwayg clemand Eone kind of

coll ateral because a lianl{eI, knLr\,rF th?l
clean loane would
sometimes create prciblerns for tire l:ank j
rrg instilution- So
that, of course. we inentioned eanf ir:r, that
there ie now a
new FrLrvision empowering the Moletary Boa].,1 1o eome trts vtith
rules and regulations governing clean Loans- perhaps
thls
'i.s afso addressed by the new General
Banking Act.
: REp. GUNIGUNDO. Mr. Speaker, your Honor, I have juet
one laBt queEtlon for thie part,icular
sect,ion. , The phrase
related interest, "' accordin to the proposed
meabur:e, the
Monet,ary Board shall define the term .,retated
lntereet1- ,.ae
used in Section 6g. Why do we have t.o leave
it it," the
Monetary B':ard to def,ine the te.rrn --related
intereet--? Why
ca.ii"t we' now deflne the terrn -.re]ated interest -_?
REp_ LAUREL. Welt ) nalnfy, fron ValenZuela,
centLeman
mainl,y for flexlbillty" W* ape trying No adopt a new
Genenal Banking,Act which hopefully
should last us anoUher
'5O years just.like
the olcl Generaf Banking Act. Each tltre
we put into. ]aw any provision or. any
regufation, it,vrfif
need another amen,lnrent r,,]ren Lhe c i r.,:ums i.ant:ee
change. fnat
is why this Representatjon, Mr.. Speaker.
an,l Gentleman frorr
va]enzuela, has always been prefe* j
ng grvlng empogretrment. to
the Monetdry Board lathei. than p,r"rtt
infr j.t dordll ln the, i:aw.
Initially, even drrr lng the conrni ttee meetinge,
the
reaction of the memberr: ,rf the coruni
ttee rvorild alwdys aay we
are givlng too mu"h now' to the
't' Morret arv Boabd or -to
the
Paee 2
n/
0;'1
"7
CJAsuilar'*:t., 1
May 12.
'l
1gg9 6:.35 p.m.
Central Bank. This Representation

has pointed outi.;in, a few
oceaslonr: that wheri we put into law wl.rat we thlnk shogld
6ay
'..
Ppgo Q
0', $ri
{\
Ansula -3 May 12, 1999
{Po - DEPUIVSPEAT{ER GuLr-A,s}
REp. LAUREL. ...When we sav pive

the power to- the MonetarV
*tuard tc'regulate'admirni*tratitnly whet
they fhinlr *h""Id i; regulatea,
in fact, empower the balking system. Wh_v?
.wc, For the iaforaratioa of
t,.e Gentliaraa frorn veren',-rera the
dif,ere.,t lrenkers, aceoeiatiof,E have
'.','.:
ver]' crose linisou wrtr the centrar
Bank. Tirev are periodically meeting
__ suqGL Lrrcre rs a
'"r 'v'srr ::egula+Jon cr circular rgjeae. ed: hy the
. Centtal Eart. you catrtror iuiagine if vou 11rj-Il fiad a ciicuXat .that is
defective, 'T?re ariflociations win
nevet stop going to trr* c**iiir nr,ut
uatil they cha:rge tlris. J q+, wit'ess io tiris,
Ge'tlema' fronr Val,enzuela.
As a trtlrnhdr.'of the Elankers, Aesor,iatiofl
c the phitippiae rnanyr miry
times' we r'ould go to centtar Barrk
to cottect or io change oirort**. so
ouy attit*de is, if *'e alron, the central Bank to *qgulete w.i'rout
:1
necerslliir,,.guiiirg ii dor,r"tr in the lar.v, it is etrpowering fhe bsnrcinB
,.+y.stee not necessalilv
the Central Banlc,
REF. GUMGUNECT. .T'hsxk
vou. Mr, Speaker, yout Honw,fof &.at
explanation, ' "
Let rne proceed io sflotirer qrresiion

. i iirat reiets to sectiou ? rtr Loa,og
efld Otlrer Credit ,^.cc+mncdationc
Agei:ret He*l Eetate, I notice trffe
' : trnal the ceiling is 7@6 wldie
in House Eifl r{o. I i60:,which is
th* t iu drat
t,,, *ou eubstituted bi, Houee Bill llc; bgl4,
it is o::ly 60%, Ifi{y FC,kne,
Vour f;Ioror, tJle reason, tfre
wisdom for itcteasing it by twoh
n.
t-f |, X
Ansula -3 May 12, 1999
REP. LAUREL. I sm eorry, Gentleman

distinguishecl Minority Leacler was
"just conr.rrenting. r did aot rresr
exactlli what wae the guertica, . .., : :
REp. GUMCUNI,O. Let ine re'ear the rlueeiiutr. Ia Scbtidn ?l of

' Hsuse Bill llo. oEI4r ttre r:eiling for roans and other medit
accommodations agai'st real estate is peggecl at 7N/o. But i,, House
Birl
, f .i I
No' I 16o' which is rhe tri,U rhat was suhstit.rterr- by Houae BiIl nlo, 6814,
-
,,,the l*vel is oldy EOs/o. MaV w-e rour rrhrrt i.:r the reason fOt t$e 1046
increase in ttre ceiling?
RE'P. I"AUREL. Mt. spea-ker, Getrlrenis* ftom vareflzuelai ret ,ae
reveal to you a:eother ser*et from the committee on Baats 6fld Financial
' Irrtermeriiaries, when
ftrally ^rrris cotntnittee was ,r,rgani;el and the
Ge*eral Elarrlcing Act bill *rar cllhmittecl to the cornmiiteer th1 attitude of
ilis Representation was open-mincled. In fsc.r. ure weut .tbLrougtr every
. qectip4 in this General Ba,.king Act witho't a_uy i'put &om flris
Re$resentation. perhaps trre contribution of ilris Reprerentation ir only
{1
Ansula -3 May 12, 19Sg 6i40 p.m.
>nc or report shguld only
be made available to the Centual Bank and that this...f a.ta
11:'', t{ ii
cl
Boqgnlhr - 3 Mav 12 1999

---J --r _''_
(PO - Deputy Speaker Guths)
r REP. LAUREL: ...and Frat tris extemalauditor who is paid,by tre
commercial bank must report only to he commercial bank only allo,rtng
tre Cenhal Bank to have a copy of tre report.
Now in hls parficular section trat is being qrnetomd ry fiB

Genfleman from valeruuera, it is even possible not to tncfude rre
section anymore because in tre past, as the Genteman mcnlioned, it ls
609,6, nor lt is beiqg made 7o% because at lhe time of the shdiee,trcirw
made wfrich sbrted In 19g5, he economy was doing all right. tf &re
economy wor6en6 again, then perhaps thio figure of TOlt may not be a
good figure. Perhaps it should be brought down agaln to 60%, ,So trls
iswhat I mean by non-flexlbility.
Persona$,I would prefer $rat lhis is out and let t6 tt{grctary

Board eay, 'At tris particular lime when the valrcs of real eshtra{s very
high, we can make nzoo - And rwfien 0re sifuation worseni, we bring it
down to 6006 witrout necessitailng having to amend
tre hw agaln.,,
so h obsanrafron of 0re Gen0eman from varnuueh ie,eonect
At he proper tm6, if he wrshes to arnend fris provrsron

or corpbtety
remove tris provision, hls Represenhton wil
agree.
1k
ni' *';
' $peaker, forsignifying your wiflingness to detete fris parficr&r,protririlon
or amending it at trs very least. I was just interested to frnd

6ut n"
ar*l#er because this 10% increase fanslates to mlllions g[ pesos.
And
at tre back of my mind I was thinking that 0ris increaee in fre
cciring was
td aocommodate rear estate deveropers rike

cameila anc'pirnera
Homes wtro would like to avail of loans from banks.
:. i $6 let me proceed now, your Honor, Mr. $peakg, to: anolhar
unflke in fie ofirer lar,ns in frre Rutes of Court, pD 1g2g,

he lffbrnenl
tely hke posseseion o,y.er fhe
. ,. property flrowins into,he sfeets
the judgment debtor.
0;1 5fi
.7,
Boqgulto 3 Mny l?. 199!) ';.. r

', , ,''.,,,' S:45 Pm
jl
'l' 'r" : rl
May we loow wr,at is the fogic behind thrs parucu{ar. provrsron
.' because baeed,gn lrisprudence, based on exrsting hr,vsl-it is a publlc

. i'r policy-as shted In'ReputScAct...
. "!Ir;r.:_1
REP.IAUREL. Tiris...
':_ :j
,REP. GUNIGUNDO. ,, Lel ne finish, your.Honor, , RSr$[s,Act _
"' ''i wefi'anyrfdy, it i6 popuhffy Krown 'as he' Maceda law which
$tvcH grace
'. ,,log1g, behird fris parlicular secton because we strorgly ,oppose trls
''- Par'fcular provislon, , ", : .:.
.a rl.
-*:,',0fr c.r1
BRACIA-2 May 12,1999
(P0-Deputy Speaker Gullas)
-.
REP. LAUREL. ... This is in order ro discourage borrowers from
, r' ., ,:t j
.resorting,.te nuisance claims and, dilatory suits to enjoin,the rgal estate
Perhaps this is a good section, Mi,' Speaker.
Because preciselv the banking sl,stem at the momcnt is having difficulty:

: ,_."i,; i..,
, ,,there are many bad loans and they have to foreclose properties;-,they pay
taxes of the'teal esthtb they have i.reclosed. rhev get in to the

.cannot
i,.':,ii
prgperly. thel' cannot manage the properly. the r.rrvuers continue to gperate
' rvhatever the banks have tblecloseci nhich nrav endanger the nert owners.
REP. GIINIGI INDO Your lk.rnor- Mr, Speaker. at this point I have to
disagree r,vith you'as far.as this particular scctir-rn is concerned. Because
under the-Maceda I-aw which is R.A. 6552. it is a publio polioy'tro protect

buyers of real estate on installment payments agairrst onerous and oppressive
, copditions, And based on jurisprudence, when a toreclosure o{a property is
exdcuted. tlie nloment an arrctiori is condtrcted what the wirining bidder bids
^l
.lhe ong-year redemption period that is the onry time whpre the judgment
. ,i. creditor gets the oppbitunify to receive a new title. The rfioment
an auction
. Oii,' j,','
I
a29
BRACIA.2 Mav 12.1999
title of the judgment debtor, 'Alter tire olte-ye&r rcdenlption period that is the
onlv time lr4ren the judgrnent creditor can gel a rvrit of possession from the
courts so that he can take possessioll over the properry*'becadse bythat time
his interest lras alroadv nratured into rights o[ orvnership and, therefore,
with rights o1-ownership he has right of posscssion. My problem herE.is that
rve are trying to help banks but we are sacrificing.judgment debtors who are
down on their knees, and then you rvant them to live in the streets because
, .
you will already be throwing them out of the streets by taking possession.
How do you expect ajudgment [creditor] debtor to put up a bond when he

:.
i. can hardfy pay the dgbr that he owes to the bank which is ruled by
..:':
REP. LAUREL. Mr. Speaker, Gentleman from Valenzuela, this
Representation will yield to what the law states. So.we do not need to put
'.1
, this. here if it is illegal.
i:i,:,
REP. GLINIGUNDO. Well, a! the proper time we,wlll.,rnJroduce
amendmcnts to delete this particular section because we find'this inimical to
the interest of the transacting public. Because as a lawyer, there are so

.i...
marrv lawyers here. it is renlly really a pity to handle cases whgrqyour client
is about to be thrown o*t of his home, hiloftice because he hirs ilbftulted on

-{ 'A-, ,rir
l\ . r..'rt :1(!
'oZ
ii ,
BRACIA.2 Mav 12,1999 6:50 p.m.
his loan with the barrk. Just when he needs the

umbrella because it is
, " i:ii
raining, the bank takes away that umbrella.
Let me proceed now to another soction which is section gr. Is this a
nerl provision- Provisions for Losses and write-ofh as far

as R.A. 332 and
BP 6l are concemed?
REP. LAUREL. partly new. Mr. Speaker.
REP. GUNIGUNDO. When you wnte offa loan will this be rex ...
a295
CABANOS.3 May 12,.1999 6:55 p.m.
REP. GUNIGUNDO. . . When you write ofi a
deductible?
REP. LAURFL, Mr. Speaker, Gentleman from Valenzueta, tris is subject

to BlRregulations, if justified, yes. Butthis Representation is notsure of h'rs reply,
REP. GUNIGUNDO. My only predicament here'is that, if it is tar

deductible, probabty we should insert a provision or add on to the last #ntence of
this particular section that ii shall qualify as tax deductible, since both loans are
tumed into bad debts. And underthe National Internal Revenue Code, bad debts
are,tax deductible.

Representation hesitates to include in the provisions of the General Elanking Ac-t
provisions that may need to go to the other committees in the House. So if
possible, we would rather let this be in the Internal Revenue Act and not be
included in the General Banking Act,
REP. GUNreUNDO. Well, let me continue on to another point. Underifrrel

,i.,.;,
House Bill No. 1160, there is Section 80 which deals wifi the lndapendent
Audilof, rvhich is not included in House BillNo. 6914. And a fol'r momenb ago,
you revealed b us a secret:ftat you were not inclined to include a provision on
Independent Auditor because to your mind it will stymie the flexibifity of the
BSp in
ij
CABANOS - 3 May 12, 1999 6:55 p.m.
oblige this Representation to another explanation why we have t0 defde _tris
provision on Independent Auditor in House Bill No. 6814? Because | find,his

section full of wisdom and it could even further enhance and strengthen the '
regulatory and supervisory functions of the BSP, and at the same time, promote
'''..
further the prudential measures in the market-oriented reforms being pursued
.l
right norv by the Bangko Senhal ng Pilipinas.
REP. LAUREL. ,Mr; Speaker, Gentleman from Valenzuela, perhaps there
was a miscommunicalion earlier.. There is a provision requiring an auditor.to be
hired by a bank, as we explained earlier, that would report to the hiring institution
and submit a copy to the Gentral Bank. The only objection this Represenbtion
,[ad rvas" in the original presentation of the provision, Cenhal Bank wanted this
auditor hired by the commercial bank to report to both the commercial bank and
|,; ,i
@3
I
i
I
SANTOS.4 May 12,1999 ,,.,,1 .f'"80p.m.
i I i,i.,..,i .'
The objection here is, we
,' ,-,fttldits being done in the commercial banking system. First, ig the:Flternal
- auditorof thebank. second,'istheexternal auclitorhiredbytd6t,ankl" Third,
' ther" are the auditors or examiners coming from the cenhal Bank. ' so,'each
commercial bank is audited thr+e times.

'.'
REP GUNIGUNDO So what we are saying here is that, we. can do
without this section S0 in House Bill ll60, for House Bill 6gl4, considering that
-" all of these banks undergo aurlit at least three tirnes a year and thar is tuffiiient
andneednotbeinc|udedinthisproposedmeasL|te
: r' :' '
could you please exprain to us the wisdom of section g5, prohibition to Act
':'
as Insurer. According to this particular provision ,,A bank shall not direcfly
engage in the insurance business as the insurer". what is the rea$on behind
this
' particular provision of law?
:';.: REp.' LAUREL. Section 85, centleman
from Valenzuela profiibits me
banking institutions to act as insurer. A bank shail not aiiectiy'"ngage in
Insurance busihess as the insurer to exempt banks which
have equity in'
Insurance companies. The term "direcfly" is added
to the original provisiort. In
other words, they can still deal in insurance

but indirecfly.
REp' GUNrcuNDo what tt;t
is rhe reason behind the prohibiton, ffi,
SANTOS - 4 May 12,1999
engaged in the insurance business collapsed and as a result

we have
prohibition?
REP. LAUREL. This is not a new provision
REP GUNIGUNDO Are we saying, your Honor, Mr, Speaker, that

this
prohibition is also included in RA 337 and Bp 61?
- i:'
REP. LAUREL. Also included, Section 73, Genfleman from
Valenzuela.
REP. cUNIGUNDO. I see. So, this particular prohibition has been in
place more than fifty years.ago?
Let me go on to Section g6, ls there an exisJing supervising arid
examining departrnent of the'Bangko Sentral?

MATIWAT - 4 M.err -a19
..sd' lOOO 7:05p.ur.
(PCI - DEPUTY SPEAKER GULLAS)
REP- GUNIGUNDO. correct or not.

THE DEPUTY SPEAKER (Rep- Gullae)- The eeBaion 1a

suq|.ended for one mlnute.
It was 7:05 p.n..
At 7:05 p.n., the session. wal resumed -

DEPUTY SPEAKER (Rep. Gullae). The
reeuloed -
REP. CONZALES (N.). Mr_ Speaker-

THE DEP]ITY SPEAKER ( Rep. Gut l-ae ) . The di6tlngulBhed
'Deputy Majorlty Leader.
SUSPENSION OF CONSIDERATION OF H.B. NO. 68i4
REp. {N.). Wlth the ktnd indulgence of the
G0NZALES
two Gentlennen on the ftoor, Mr. Speaker, I move that we

tenrporeirlly auepend consideratlon of Comrnlttee Report No,
2AA on Houee BilI No. 6814 to take up eome lmportant
matters, Mr. Speaker.
rHE DEPUTY SPEAKER (Rep'. Gul].ae) . La thene any
ob.lection to the motlon to tenrporarlly euepend conglderatlon
of the meaeure? a-qj_lerrce ) The Chalr hears none, the motlon
is approved.
THE DEpUTy SpEAKER (Rep- GuLtas) T?le dletlngu!-shed

"
MaJority Leader- :t,.,
wr'' ':i
(i 'o(, 'rt,,
I,IALIWAT - 4 May 12, t99B 7:05p.ur. z
c'N. Rpr..N s.B. No. 1196

''NSIDERATT'*oF H.B- ,c'MM.
NO: b992 AND
REP. GONZAIES(N-)- We are in receipt of a conference

connlttee report of the dlsagreelng provlslon8
of Eenate
Bj.II No- 1136 anrl Houee Bill No- 5992- We
underetahd, Mr-
.,. Speaker,i that copiee have already
been dtetrlb.ut,ed :to the
.Membere in. accorclance with
our Rulee- And f lketriee, in
-. aecot ciance with our Rules, mdy we move for ite adoptlotr by
..
. calltng the roll of

Memhrers on nomj naf _roii.rg.
.
NOMINAL VOTING OIt CI]NF. COMM.

RPT. ON S.B. NO: 1L36
AND I{.8- NO. 5992
THE DEpUTy SFEATffiR ( Rep. .
cul_ t.as ) Is there any r
objection to the moti.,.rn? ( Sijence ) The
Chair heare none,
the motion le approveri - The ,secretary {jeneral
le directed
to call the roll for the roll call vote.
FIRST ROLL CALL
THE SECRETARY GENERAL, readins: RolI eall of Memberg
for the conelderatlon of Conference Conrmlttee Report
ent it led : AN AC? AMENDING REPUBLIC ACT NO. ZSTO, OTHERWTSS
KNOI{N AS SPECIAL ECONOHIC ZONE ACT OF 1995.
The Honorable Congressmen and Congreeewomen:
Abad . J r:r '
' l: ':l
( Ineer:t )
Zubirt -
SECOND ROLL CALL

THE SECRETARY GENERAL,
z,eadtnr:: Second caLl on nonlnal
votlng for the consideration
of the Conference Conmlttee
Report.
{ tlir ';iJ
fl' ' :1
tit :;
MALIWAT -4 M---
rro.Y ra
IZ, J.VUV Z:$bp.n.
The Honorable uongregamen and congressndomBn
:
Anatong
Andaya, Vtreente
Bautista, Franhlin
Bondoc
Defeneor
Duavlt
Dlrtrll)it
': Garcia, Simeon
' Jaloejos
Montenayor
Planerae
Suarez
Young
Zart iga -
ADOPTION OF CON. COMM. RPT. ON S.B. NO. 11361

AND H.B. NO. 5992
THE DEpU?y SPEAKEF,(Ren. g,r11.u,. I^/lth 167 afflrDatlve
votea, zero negati\re, sel,o abBtentilrn,
\
: tn/-
I
(J
rli ! lal.
t.ttl I "!e' '&r rvs
Yr',
(PO-Deputy SpeakerGultas)
House Bill No' 5992, 'hn Act

amending Republic Act No. 7916,
otherwise known
as the Speciaf Economic
Zone Act of 1995,,, together
with Senate : Bill No. 1 136.
the Conference Committee
Report is hereby ratified
our sincerest congratulations to the distinguished chairman of the

committee on Economic Affairs thp H^rr^r-!.r^
,ffairs, the Honorable ERalpfr
^,-L Recto, all the
Members of
said committee' as wet as the
Members of the House paner to the
Bicamerat
Conference Committee. (/lpptausel
REP. GOIIZALES tN.). Mr. Speaker, mav I move for a one-minute

suspension.
THE DEPUTY SPEAKER (Rep. Gullas).

Session ts
minute.
ItwasT:10 p.m.
At 7:11 p.m., tte sessticn was resumed.
THE DEPUTY SPEAKER (Rep.

Guilas). The session is ,esumed. ,
Distinguished Deputy , Majorify

Leader, the Honorable
Gonzales.,
m 4il, 'tt',r
v-ej=i!-.r r/|a)/ 12, lggg
f ',) 7:'10'",t.
CONSIDERATION OF H.B.
NO.6814
(Continuation)
REp. GONZALES (N.). Mr Speaker, may I move that we continu

consideration of committee Report
No. 206 0n House Bit No. 6g14 submitted
by
the committee on Banks and Financiar
Intermediaries, and for which purpose
I
ask that the secretary Generar be

directed to read onry the titre of tie bit.
THE DEpUry SPEAKER (Repl Gullas).

ls there any objec-tion to the
' rDotion? fsrbnce) The Chair hears
none; the motion is approvedi igfle
Secretary
, General i5 directed.to read the
tifle only of the measure.
THE SECRETARY GENERAL. i:

House Biil No. 6814, enrifl;dr
.,AN
ACT PROVIDING FOR THE REGULATION,
ORGANIZATION AND
OPERATIONS OF BANKS, QUASI BANKS, TRUST ENTITIE$,
AND FOR
OTHER PURPOSES".
REP. GONZALES (N.). Mr. Speaker,

to continue the sponsorship of the
' mea;ure, I ask for the recognition of the
honorabre chairman oi the sponsoring
Cornmittee, the Honorable Laurel. !
"
THE DEpUTy S'EAKER (Rep. Gu'as).
Any objection io.the motion?
(Silence) The Chair hears none;
the motion is approved. The Chair,recognizes
the untiring and hardworking
chairperson of the commiftee
on Banks and
Financiar Intennediaries,
the Honorabre Macario Laurer
rV to continue answfing
interpetations from the distinguished
Genteman from varenzuera,
the Honorabre
Gunigundo.
Tnn ,,.t
ti ,1 r. ry {n.
(At this juncfure. fu^ mW Speafrer retinqushec!

Honorab h Depty speaker
Rep' oirci [." lrZriTi'
he Chair to the
REP. GUNIGUNDO. Thank you, Madam Splarrer, and Mr Speaker,

May I get now my answer to my previous question from
the distinggjshed
Sponsor regarding Section g6.
REp. LAUREL. Madam Speaker,

cenfleman from Valenzuela.
the
queslion uas'properry addressed
because there has been-some
mislake in the
printing' we shourd change
this from capital retters to sma,
retters because
this is just a generic name for the departments,
the different banking institutions.
Honor, for cqnfirming the recommendation

to me of my cons'rhnt tfiat words
"supervising and examining
department" is a generrc term and. therefore
we
shourd not use capitar retters for
s and E. instead reprace it with sma,
retters,
My ne)d question has something
to do with S*ction gg, the power
of the
Would not it be a better

wording if instead of usinq the
word 'the" appearing on rine 1E after the word
"regarding", we shourd reprace it with the
worcr ALL so that the Bangko
sential
can haye all the information
that it needs in order to monitor
: , the
T
REGODON.4
wt2,1999 7;15 p,n"
PO - (DEP. SPEAKER FUENTES)
REP' GUNIGUND'. . . . we wit not sufrer the same iate

that Indoneeie
suffered because it did not have access to informarion
when $g stu@p truas
critical?
REP, LAUREL. Madam Speaker, Genfleman from Vhlenzuela, no

problem on this during the period of amendments
if the Genfleman wifl klndly take
It up.
REP. GUNIGUNDO. Let me now proceed to Sectlon 92, Voluntary
' Llguidatlon". lt appears here in line 11, that ..The

Monetary tsoard and he
: Phllippine Deposlt
rnsurance corporation as the regaily desrgnated bank
receiver
and liquidator sha have the right to intervene and take such steps as may
be
necessary to protect tle intersb of creditors."
why did we incrude the philippine Deposit Insurance corporation?

what
is it$ role in receivership and liquidation ?
REP' LAUREL. Genueman fiom varenzuela, he designd.d

rocefuer ls
really the PDE. They bke over.
REP. GUNIGUNDO, tr{y uorry here is that,

if we include Sre phillpplne
Depos* lnsurance Corporalion as a bank receiver anO liqul*.fqr, it will
unnecessariry interfere wiEr trre
fle<ititity of fre Monehry Bo"rd. t^fhd;there is a
conflict of interst because d difisrent interpretations and opinions betrrveen
the
PDIC and the Monebry Board?
Whose opinion will novy then pr.vrn f
F
tl
Oil '.r I
"t
t: i)t
REGODON.4 May 12, 1999 7:15 p.m.
there will come,a.trn,,when there will be a:difierence of opinion

bfrilaffi lho
[4onetrry Board and the Phlllppine Deposlt tnsurance corporatbn. Becarlsc
the
Mone'tary Board supervises; [andJ monitors and rcgulates all of thoss banlc. The
interest of he Philippine Depoeit lnsurance corporation is to pay d ail d troeo
depositors of banks up to P1fi),000 bassd on their present chader, wtrictr,
according to the dhilngulshed Sponsor, we ate In the proctsB of amending.
There will b conflict of interest bflyeen these two, because as the insurr,
hs will
try his best lo avoid being expooed to paylng the bank depositors, whib s'g
Monetary Board will insist that the bank is arready in the red and there
is a ned
for ihe PDlc to immediately pay ofr the bank depositors. why not just ddde the
Philippine Deposi! tnsurance corporation in this parricular provision and just
allorv
the Monetary Board to handle the voruntary riquidation, and after the [4on6bry
o Board has done ib part, has prepared its recommendations, just ret lhe pDrc do
ns o'vn thrng? Because thls parttcurar provrsron
I$ rs a Joht recervemfirp end
liquidation. we wiil not definireu have a situation of peacefui

cood$Enc bfty6on
lhe Monetary Board and the pDrc. Because even during
the commfilEe
deliberations, the pDlC has recommended provisions
that aro anbgopidic a,n
/
fl0iJl.0ri
î -; n-7
lii
ft,] 1_:
Iday la 1999 7:15 p.m"
even inimical to he interest of the independont central Mon.tary Auhbriry; whbh
is the Bangko $ental ng piliplnas. . . . /edr

,.4
.-W-
DOMINGO.3 May 12, 1999
- REP. FUENTES)
REP. GUNIGUNDO, ,..which is the Bangko Sentral ng pilipinas.
REP. LAUREL. Madam Speaker, at the proper time, ihe

Genflemap from
Valenzuela may come up with the amendments that he
has in mind. .,
.i.
REP. GUI{IG.UNDO. Let us proceed to ,,Sectbn 94. Seilement of
Disputes." Accoiding to this particurar provision of raw, ,,...the Bangko
sentrar
quasi-banks or trust entities arising out of and involving

relations between and
among their directors, officers or stockholders, as well as disputes

between any or
procpeding? Becausethe"Bangkosenhal has confol

and has supelision over
ihat particular banking institution.
The onry request is the coordination with$re

Bangko sentrar ng pilipinas.
REP, GUNTGUNDO. tjust find it more expedient

to settle disputs if the
government agencies or Instrumentalities

in actionli or proceedings Involvlng
controversies in banks, quasi-banks,
or trust entities. Because if they
wi, just be
A{'t'l.,t,l
,4.,
DOMINGO .3 May 12, 1999 7:20P.M.
merely consufted, chances are, they might not even reciprocdtewith

ti6'queries
to be sent to them by these other government agencies. tt tnef
are'mdae into a
ne_cessary parfyi then they wlll be forced to disclose the documenb, the
recomn'tgMafions:and conclusions that would have been produced
as a result of
'' necessarily involving the central Bank. lt is just that the coordinatiori
is required
I
REP' GUNIGUNDO. so, what you are saying here is that, this particurar
sectidn, section 94 refers only to intra-corporate or intra-bank
disputes. lsthat the
er<planation of the distinguished sponsor?
REP. LAUREL. That is correct, Madam Speaker.
REP. GUNIGUNDO. Let me now proceed to another sec,tion, .sec-tion g6.

-
Prohibited rransactions." In paragraph (a) of section g6,

there is this phrase,
"independent contractor". I am curious to know what is the dsrinition of
lindependent conhactor'" is this a subcontractor
of DpwH or it has.../mvd. _
nri l.!i1
May 12,1999 /:23 p.m.
- Deputy Speaker Fuentes)
his role in the banking industry?
REP. LAUREL. Gentleman from Valenzuela, thank you for waiting. .This
was inseded by the pDfc. Thoir concern is, I guess, based on cases that they
have handled, consultants even if they have no say in management sometimes
take advanlage of the bank; and therefore since they are not officers of the
provision. That is why the.y added this b'ecause some banking

institutions
contract wiih individuals like consultants for, maybe, .legal or what. other ...
who is a lawyer.
who
independent contractor from a lawyer who is a consultant?
Mlluna i'1 May 12,1999 t:zJp.m.
guess, is to include all parties who are not

members of management.
SI" JSPENSION OF SESSION
THE DEPUTY SPEAKER (Rep. Fuentes). With

the permission of the two
.,ii
ff
LEDEsitA. 4 $rIi1 May12,1999 i1 7:30 p.m.
(PO - Deputy Speker Fmntes)
RESUMPT|Of{ OF SESSION
At7:fi p.m., fie eassbnwas rcsuntet'".
THE DEPUWSPEAKER (Rep.Funts). The session

ls resunpd.
SUSPENSIoN OF CONSIDERATION OF H.B. NO. S814
' REP: Goi'tz\LES (N.): Madam spsaker, r move that rvE suspend in the
meantime consideration of Gommitee Report No,206
0n House s[ No.6g14.
THE DEpUry SPEAKER (Rep. Fuentes). Any objecdon to
thd motion?
lSlteltce/ The Chair hears none; the motion is approved.
REP, GONZALES (N.). Madam speaker, I msve for

an Additonal Rdorcnce of
I
Business.
THE DEpUTy (Rep. Fuentes). Anv objec.tion?

fs/enoc) The charr
''EAKER
hears none: the motion for Addrtionar Reference
of Business is apprwei.
ADDITIONAL REFERENCE OF BUbINESS
Secrefary General
Sryker .read
made ttp con*pnding
followiryHouse Reso/crdon fd fie
efercnce.
ln hW
:
- nsonl, {t. Î
,
-_fltr,
II
nfi.t(ri;
a208
4:50 p,m.
CCNSIDERATION OF H H. T,ICI.6814
C*ntittr ratinrr
PERIOD OF $PON$ORSHIF AIID DEMTE

"
REP. l-iOXAS Mr. Speaker. ffipyllr ypu
At this jrJnctuis, may I rnovo that v/e notr proceed to the Unfinished
Businoss by cuntinuing our considoralion on $econd Readlng of commlttoo
Report No. ?06, o1r Houss Bill No. 6SJ 4., submitierl by fhe Commitee on Banks
and Financlal Intsrmediaries.
At this juncture, Mr. Speaksr, may I ask that the $ecrehry General b
directed to read the titis of lhe measure.
lso move, Mr. Spmker.
THE DEPUfi SFEAKER (Rep. Gultas). te there any objos.tion to ths
motion to continus the conslderation of commitee R,rport No. 100, on House
Bill No. 6814? (s/erece) The chair hears nono; the moflon is approved.
The Secretary General is directed to read the tifl* only of the measuro.
THE SECRETARY GENERAL. House B|II No. 6814, gnftled: .AN
ACT PROVIDING FOR THE REGULATION OF THE ORGANIZATION

AND
opERATtor,J$ oF BANKS, OUASI_BANKS AND TRTJST ENT|TIES'.
IAND
FOR OTHER PURPO$ESJ
0*t 3{l
L,?.
l
SANTOS - 1 May 18, 1999 4:30 p.m,
THE DEPUTY SPEAKER (Rep. Guilas). The Chalr, therefore,

recognizes our distingulshed and hardworking chairman of
the conmltlee on
Etanks and fntermediarbs, the Honorable Mecario Laurel M, to bgln
answering lntgrpollatom.to thc msasure.
THE DEPUTY SFEAKER (Rep. Guilas). The ctistingubhed MaJorlty
Leeder, ths Homrable Mar Rolos.
REP. ROXAS. Mr. Speaker, our parliamentary stafus ls that wo are in
the Period of Interpellation, and when the House last suspended considsration
of the measure, the disflngulshed Genfleman from l,lavotas, ths Hononable

o Magi Gunigundo, was in the process of interpellafing the Sponsor of the
measurs. r ask that he be recognized eo he may confinue his Interpelhflon.
I so move, Mr. Speaker.
THE DEPUTY SPEAKFR (Rep. Guflas). ls there any obJectlon to the
motlon? (si/ence) The charr hears none; the motion is approved. The charr
recognizes the distinguished coileague from varenzuera, t'" r-bnonbre
Gunlgundo, to resume his interpellation of the Sponror
REP. GUNIGUNDO. 'r'hnnkyou, Mr. Speaker.
Your Honor, distlnguishecl Sponsor, durlnq tho

last sories ol oUr
int'erpellation on the propooed House Biu No.
6g14, which is a subtffi,te uH of
i
l House Bffl No. 1160, this Representration was

ti seeking the deflnluon ottherem
92
.l
l
2
I
fl:-: , 'l r
1 ,l 11r'
| ,',1i,
I
/:\
SANTOS - 1 May 18, 1999 4:50 p.m.
"independent contructof hat was used in paragraph ,,a)',

"Sec. g6', of thE
said House bilf .
May we now know from the distinguished sponsor what is fte deriniton
of independent contractor?
REP. LAUREL. Mr. speaker, the understandrng of thrs Representaton
on the deflniflon of independsnt contracto/' is that these ere indlvlduals or
group of lndfuidual$ who arp not part of manaqement" Hotrt,gver,

the
Gentleman from varemr.reta rrld point out corrcily that this mqyti,
ths samo as
consultants. At the proper time, if the Genflamen worrld llke to submlt an
amendment, we may be prepared to accept ths amendment and remove

fhe
words "independent qontracbl''
REP. GUNIGUNDO. Thankyou, your Honor, Mr. $peaker.
This Representalion was just trying to cladff what le thig torm

'independent contractoi' so that we can disxingulsh
it fTom the word
"consultanfl. Because we would not liks to use rerms and phrases which ws
do not know the derTnrdon of, especialy in this propooed measure

wfiich ls a
very very signlficant msasure that wourd govem he banrdng Induotry for fie
next 50 years. so, wp will be submiting our cni,R defniuon but ryr rvorld
llkp
to get he definldon from fre @nguished sponsor so thailf 0re
defrnrdon of frc
dlstingurshed sponsor-srfffee"trre' Represcnhton,

we uflr no rongor a$mft
our oryn indivldual amendment, becqus
f?om he reoponse of fre . ...
3
Oili ijli
t 1.',i() i
l{J\T MAT , l fl.:r:; lf;. I itii/t d'FEn m
l
t
( L-(,)
li:[F - tllTl.t TGf rr.ilti r

i:ri,r'r, l-lr,-. lteBponge of the
't
'il si int-4uisl'rec} llr'lii.r,rrr. i r-. rrE r-:rr'-r f.ir rrr- !.r',rrL. !7e a:re r|)r r)oa
suIe f f- r+hat wr: itn l,ty 1,|\rj l,r.::r,trt j t.ti.t r:r,er:rfenL contractorr
rF:
^
l Ytec:.rtt:ert ivrj t:arLrLoL rliel,irrguish ,:r r.-onCjullantr from an
.l
: inclependenl, r:ortIt:.ac:Lrtt. - An , irrdr:pr,:nrl' nt corrtr.actorr ia on
equal f oot irrEi with a c_lir.r:c l,cr , .,?
i t,h an of f icer , wlth an.
eTtrplfiyae .rr. rjr..]ngultarrt r_rl' agent arf an\i LrAnk. Anrj. there ar.e
Bo many prohibitione enumeratecl or Iir,;tr:d clown in Sectlon
,]
SB . Tlrat, ie tihy we want to be ver.y , vi:ry srlre __ we want
.1
i to ltave a sharp def inition cf an . inrle pe:nclerrt cDntractorr to

.:
ai avoid ccrmpliDations and mi sj interpretat ion in the

il implementat ion of this particular pr,r_rvieion of law. We want
l1
.l
:l
I to inc lude 1ntc, the recr-rrde the def irrit ir.rn whl Ie here ln
1
plena.ry so that when there are questions i-n the future
I
they
can ,llvraye refer to our interpellatiorrs that r^re e.re novr
PIeBent ly ri.rndUcilng.
REP . LATJREL . TLiank you , Gent lenan f rr:m
rl
Va lenzue 1a -
,.]
];
REP. GUNI(IIJNDO. I,ly next queetl.rrr
ers to Sectlon 6 r.ef
::ii
we have &lready st,e.rtBd front i)ecL i:ori 6l a1l the
o vray clowrr
to Sect ir-.rn 36, we wouirl fike t r.t Eo t;tar:E .bo the f1.et
1
few
$e.:r"Irne, o f Hor:ee Bl I l l.{o . 68 14 .
I
i1 In par.tirjular,. iE t,hts I'ar i"i-.ru-Lar.. sectlon a

rll
new
ii
ii
Iltovis iorr thrat is nr_rt fourrcl in !,A - il37 and B.p. BIe. l.r,--,
l 61?
I
!
1l
0ilf .;:,3 i
I
:
ii
i.
t\
MALIWAT -'I t{ey LB. 13gg 4: 55p. ur.
REP- - Mr. Speaker, thie Secbion 6 ie in a way

LAUREL
rr.ew frecauge there hae been a deletion f leilings. r_,r
REP. GUNIGUND{J. I was just goj.ng over:, your Honor, Mr.

Speaker, with the matrix that wag pr..eparei:l by the Cor:mittee
on Banke as f ar ;rs Hr,,usr: Bi i I l.L.r _ 1 160 whlch ls the
subgtituted l-.'i11 ie concer.rLe(f - And accorciing to this
particular dcrcument, after the sentence rthe Monetary. Board
may preEcribe ratioe, ceillngE;, linibationIj or other forms
of regulat j-ons orl a differ.ent 1;ype of accounts and practices
of banke anrl q11au1*Sarrksr which apLtejer,si c_rn p&Be B, Ilne 23
and 24 of House Bill lio. 6814,. t,her,e i E ,e.nother sentence
rvhich was riot lnr- l_urf ed i,n ii{rrree Bi I I il,-, . 6814, lt reacls :
'The l'1r.ry1g1t.rt Bc,ar frrny e.xenlih f,a] i; i,::1lf ar_. r:aLeErsrLes of
tr'arrsaert,lc's; J:t"rrn; :rrr.ir r:rtf,itz. rrli iir,95; ;n4 .limitatlong.r
I'1rr1,' Iti: ]in r-rrv l'r-,-,n t hr: r-i j-st.i rrritr ii:lrr,,t Sr,oa1"o;. why thle
part 1.julE{r: s;enten.:e .h7ir.t r]r{rtr)T).jrJ
flr:.lrrrr Flr,rrsre Bill No- 6g14?
fiIlP. LA[.IREJ-, ir'.i r:r: l; rr t ir.l I , i.lr.. Epeaker, the
tes-.1,a [6rfren b waF: rpcr.lp'l i,I ernr'haii..1r, importance of the
1- 1r1
funct ir-'rr. Ani:l, i,,:rrr 9t:r,r l-,,-r i,p1 i{i61i;11ggEd in thtr

''err e:renrpt
c.rmmittee leveL, thc. r_:r,.rnmitter_- v;ori lri i,ot B-E1.ee Wlth the
grantlng of exempt ions .
REP - GUNIGUNDO - May we know, Mr . t_lpeaker , your Honor

,
why did the c.rrrunittee take the posi-it,ion not

c.r1: \
/*
Afit ;14
(laia<-?
May 18 1959 5:00 p.m,
(PO-Deptrty Speal er Grrllas)
REP cuNrcilhlD(r. take the position nf not giving the Monetary Board
the authority to qfant exr,'mptions? Bec;rrrsc if olrr purpose, if our objective in
giving this HoLrse Flill No 6814 life is to qive tlre l,ilonetary Board which is pafi of
the Banqko Senh'al nq Pilipinat as mLrnh flAyibiliiv as possible because banking
is a clynamic industry an,J it cannot rcmain sfaqnant or frigid, and that is why we
wourd rike to qive thewr a'j much elbowroom as possibre so that in cases of crisis.
they can immediately, withoLrt any legal cluostinrr, act on the situation without
risking any legal obstacles that their enenries or critics might raise in exempiing
fiom ratios, ceilings and limitations certain banks. May we know, Mr. Speaker,
distinguished Sponsor, the reason behincl this Committee,s position.
REP. LAUREL. Mr. Speaker , the main reason is to remove from the
central Bank the discretion. However, if the Genileman believes that we should
give this discretion to the Monetary Board, at the proper time, we are prepared to
accept the necessary amendments.
REP. GUNIGUNDO. Thank you, distinguished Sponsor, Mr. Speaker.
Let me go on nowto another provision of House Bill No. 6g14 which

is
section 12. Under this particurar section, there is a citizenship requirement

that is
to be imposed on the voting stock of any bank May we know,
Mr. Speaker,
distinguished sponsor, what is the definition of the contror test that you are
referring to in Section 12.
I_,ri;' 110
Cejes-2 l'rlav 18 1gu!r 5:00 p.m.
SUSPENSjON OF SESSION
REP. LAUREL. Mr. Speaker, may I ask for a suspension of one minute.
please.
THE DEPUTY SPEAKER (Rep. Gullas) Session is suspended for one
rjr . minute.
:
i
It was 5:03 p.m.
11 0 RESUMPTION OF SESSION
At 5:04 p.m., fhe session was restmec/.
THE DEPUTY SPEAKER (Rep. Gutlas). The session is resumed.
REP, LAUREL. Thank you, Mr. Speaker.../mvc
0fi, ,'1.6
t
ii
REC'ODON - 2 May 18, 1999 5:05 p.m.
PO - (DEP. SPEAKER GULLAS)
REP. LAUREL. ... Thankyou, Mr. Speaker.
Gentleman from Valenzuela, the control test definition has to do with the
citizenship of the corporation, which is, 'the stockholders in a bank shall follow
the citizenship of the controlling stockholders of the corporation, irrespec,tive of the
place of Incorporatlon." However, we mtght Inform the Genileman from
Valenzuela that the control test has been removed by the commitee- so, what we
are really just following is the 500,6 plus 1 .
REP. GUNIGUNDO. Thank you, Mr Speaker, your Honor. for
enlightening me on that particL,lar term. So, does ris mean, your Honor, Mr.
Speaker, that we are cliscarclino the control test anrl thepefgps there is no sense in
asking the distinguished sponsor what is the definition of the grandfathdr rule? ls
this term going to be lsed in dtrf ernrinino the citizpnship of a foreign or a domstic
,l bank?
:I
I
REp. LAUREL. Mr. {lpeaker, we simply follow the ownership of the
.'j
corporation. In this particular section 12, we are looking at "60% of th voting
:lt stocks must be owned by citizens of the phiiippines.,'
REP. GUNIGUNDO. Thank you, Mr. Speaker, your Honor.

l
.l I will not.finish my questions on the citizenship requirement because I will
.l try to connect this to another area where citizenship will come inro play
:l
when there
are situations of distress wherein foreign-owned banks can

com in to save and/
{
i
salvage local or domestic banks. t"I
"l
:1
:)
ni 't'1
RI,GODON - 2 May 18, 195'9 5:05 p.m.
MV nelt questlon has reference to Secflon 1 Z of House Blll No. 6614. May
we know, Your Honor, what is the definition of a "dishessecl bank,'.
REP. l.At,REt 'I

lro1r, 2po many ctefiniti^n!.- that can appty to distrssd
banks or shorrld we sav. Mr. speaker, the conditions. But the more important
would be the illiquidity position of the bank and thq imnaired capital of the bank.
RF:P. GUNIGUNDO. So, then, Mr. Speal<er, your Honor, at what point
do we consider a banl< to be a distressed bank? At what level? At what stage,
Your Honor, as far as liquidity is concerned?
REP. LAUREL. Well, when its obtigations to their depositors cannot be
complied with when withdrawals come, that is one factor that is considered. That
is why the cenkal Bank provides assistance to the different banking institutions
when there are heavy withdrawals ihat cannot be given by the bank to the owners
of the funds.
REP. GUNIGUNDO. So, who declares a bank to be distressed? ls it the
bank itself or is it the Monetary Board lhat declares a particular bank to be
distressed?
REP. LAUREL. lt is the Monetary Board that determines when a bank has
become dlstres$ed. Of course, thls ls upon the recommendatlon. . . /d
nf, ?fi,
DOMINGO.2 May 18,1$$$ 5:10P.M.
(P O. - REP GULLAS)
REP. LAUREL. ... upon the recomme nclation of the proper supervisory
dpartment of the centrar Bank who is in charge of this particular assignment.
REP GUNIGUNDO. So, Mr. Speaker, your Honor, when a bann
encounters a bank run, meaning the withdrawals cannot be covered by the
available funds in the bank, is that bank already a distressed bank? or is it a

distressed bank when it has already availed of emergency advances from the
Monetary Board?
REP. LAUREL. Well, it is not defined this way, Genfleman from
valenzuela. of course, we envision a bank that has a run

- that is constantry
o bleeding so to speak, on a day to day situation - withdrawals come in and the
bank goes to the central Bank to borrow funds to answer for the withdrawals. At a
certain point when the capital of this distressed bank is already impaired then the
cenkal Bank will have to come up with their declarali.n that this bank is in
distress.
REP. cuNrcuNDo. I wourd rike to dig deeper into this definition because
when a bank is supposed tn he a distressecr hank the,prescribed ceilings

on
stockholdings in banks as prr,virled under section 13 ancl 4

1 of House Bill No.
6814, are lifted ancl the Monelary Board may oxerlpf y6fipq
stockholdings. So, let
us be morespecific, Mr speaker, your Hon'r, arrorrtthis
definition of distressed
bank At what point do we cat a bank to be so-catecl
distressed, is it when they
are encountering problems but they have not yet availed of the emergency
advances from the Monetary Board?
or is it when they have arready appried and
0C, .i$
ri\
DOMINGO.2 May 18, 1999 5:10P,M,
availed of the emergency advances do we consider a bank to be distressed? so
that we can simplify the procedure in declaring the exemption from ceilings on
stockholdings in banks as provided under section 1IJ and 14 of this House
measure. These ceilings on stockholdinqs has something to do with the

citizenship requirement of banks and I lhink this is very very material in seeing to
it that banks that are in distress can find succor from foreign owned banks
because that will be the opportune time for them to soek help because the ceiling
requirements have alreaclv been liftecl and prohahly tne Lank of rokyo or Hong
Kong and shanghai Banl< can c.me in to the t)ictllre and help this bank that is
under distress. So, pleaso. Mr Spoakar, yrrrrr llonnr i am not trying to beat
around the bush, lanr irrsl tlying to be ,rcry very specific aboUt this term,
distressed bank betause it tliggers off a procedure that is unusual. so, please
oblige this Representation wlth a reply.
Thank you, Mr. Speakr)f.
REP. LAUREL. Mr. Speaker, it is ihe second instance mentioned by the
Gentleman from valenzuela, of course, in the beginning when there are
extraordinary withdrawals there will be support from the central Bank

but there is
a limit, Mr. speaker, Genileman from valenzuela as tc how much

a bank can
avail of the emergency loans from the central Bank.
And when this limit has been
reached then it wiil mean that the bank's capital would

have been impaired then
they are given the opportunity to infuse more
capitar. But when they are not abre
to then the Monetary Board should be able to reach

a point whbre they can
0c, 4i0
Mlluna May 18, 1999 5:15 p.m.
Speaker Eduardo
R. Gullas relinquishod tho Cheir to Doputy
^ . !D:p_rty
Speaker Alfredo Amor E. Abueg, Jr.,)
REP. LAUREL. ...that ls the concern of the Gentleman from Valenzueta.
REP. GUNIGUNDO. Thank you. Because, your Honor - Mr, Speaker,

section 17 is closely related to section 38 which is acquisition of voting stock in a
distressed bank. And according to this provision, in the absence of qualified
Flllplno lnvestors, the Monetary Boarcl may authortze forelgn bant(s Io acqulre up
to 100% of a distressed bank as may be determined by the Monetary Eoard,
Wouldn't it be better, Your Honor, if we just drop Section 38 and include this
entire provision as pad of Section 17 so that those who would like to study the
General Banking Act will not flnd difflculty in understanding the reason for the
extension from stockholders' ceillnqs and that of the distressed banK?
REF. LAUREL. Gentleman from Valenzuela, this is reallv more of an
exception. That ls the reason why they are separate
REP. cUNIGUNDO, so. I4r. speaker - Yorrr Honor, under these celllng
requirements as stated ln Sections 1?. 1-a and 14, wlton will this foreign bank that
acquires up to 100o/n of a distressed bank need to comply with the requirements
of Sections 12, 1 3 ancl 14? Because I ihink whcn thc tcrm "distressed bank' is
not a permanent condltlon, there wlll b.e a polnl In llnre when a bank lvho ls
declared to be a distressed har rk will no lonqer he in distress like a damsel ln
distress. So at what point in time will the bank that is now 100% owned by a
foreign entity need to comply with Sections 12, 13 and 14?
.nt A''-
/\
t
DOMINGO - 2 May 18, 1O9O f:10p.M.
declare this bank distressed to be able to comply wiih ihe requirements on the
foreign equity that is the concern of the Genfleman from valenzuela..../mvd
i:
OC.,TI N-i
ra \i:
i
I
ti
Mlluna lvlay 1B 19gt) 5:15 p.m,
RFP LAUREL. Gentlenran from Valr:nzrrela, this section, that is Seclion
38 referrinq lo the acqrricition nf votjnq slnr:k irr r rtictraqspd bank - if you read
through lines 11 to 15, this particular line re{ers to thn rnlrrrn to the ..../mll
(\t
Y
n'".,
. r;i
A
:Lr
:
l1
LEOESMA.2 May 18, 1999 6:20 p.m.
I
(P0 . Deputy Speaker Abueg)
'l
REP. LAUREL. ...return to the necessary ownership percenhge of a bank
where the requirement is 60% Filipino citizenship. In these particular lines
11 to i5, we
I
are providing for reduction of the necessary shareholdings -- no, I am sorry, lines 7
and 11 the shareholdings from the 1000,6 to gso,6 within five years. subsequenfly,
within another five years, the foreign voting stock shall now be reduced to 7o%. ot
course, finally, at the end of 10 years, if the foreign bank investing already holds
60%
of another bank under the laws of the philippines, that foreign voting stock in tre
a
investing bank that we were speaking ofshall notexceed 4O%.
REP. GUNrcuNDo. May we know, Mr. speaker, if the distinguished sponsor is
through with his answer?
REP. LAUREL. Yes, yns.
REP, GUNIGUNDQ What would be the penalty, Mr. Speaker, your Honor,
if
the S-year period within which a foreion bank mrrst divesl,its ownership to g5% and
then later on 70o,6 and finally, 60%, fails to divcst within the period of time stated in
Section 38, what penalty can brr imposed aqainst these erring foreign banks?
RFP. LAUREL. Mr lipeaker, there is no sancfien if the guidelines are not

followed because we are really helpless in this respect. Because
if the bank is not abl
to reduce foreign ownership, we cannot punish this banking institution.

rn this
particular case, we are trying to moraily require
the new owners of the distressed
institutions to reduce ownership,
REP. GUNIGUNDO. My worry here is that in case

the foreign institution that
acquires a distressed bank is so huge that it refuses
to divest ornership to meet the _ r,
.lt,
Ofi'14
{i?ai
,(r
LEDESMA.2 May 18, 1999 5:20 p.m.
ceiling prescribed in section 38, we will have definitely a crisis and we would
like to find
out how can we help the Monetary Board in giving teeth to this provision so that all of
these foreign banks will be forced to observe the provisions of sec{ion 3g. what I
mean, Your Honor, Mr. speaker, is that, if this will just be a mere guideline
and there
will be no sanctions that can be imposed against an errinq foreign bank, then probably
we should authorize the Monntary Board to wiihtrotrl nr ir"ez. or suspend banking
transactions of that particular foreiqn bank that refuses lo comply with

section 3g. May
we know your thoughts reoardirro lhis particrrlar nrnhl.'rrr?
REP LAUREL- rt is incumbent on the Monetary Board, Genueman from
Valenzuela, to see to it that efforts are exerted so that the ownership level can go down
to what is acceptable...teV
',"f
0c l{j
li".l'i l,;i
5:25 L.\ .n.
,e
( l'(r iitr;p1r l,f ijr)r:ta ii,ji. ,1i:,r r",1; I
.
ll-lji.l,-.t4jJ_tstrL- -,. 1(_) \.rhiri, .i.r:-: i:rr.r,rt,l.,r!., l.:. But we
.l-r trt,1, ;jllvitj j.ilr :tr.r t ;1l1-!r i.,lrltl;.i ri0 i|:,f, l lUlriOnS in this
iri',i'tii jr-t lirr' FJ jt,.Llat,i.ttj: t1.,r.ir;rIrFj r-,rrr." i f il r.,,,,,:r. hap,5.,s6s -
I
:l
I
REP- GLINIG|IND{1 . Ok;1.1., i1 i l),.jFr ,\:,r,u ;., I,r- saying bhat _the
l di -.:t, i rLgrrishecl spr:Lnsr:r i s lfa:,,irrfj i;i1;rt t,l_. is night be an
,i
j.rjDf ste(l s.:1t r;ai; j on whi..jh j.ghr n,rt hr:pf,en l:re,TJently
il
m in the
;,] i.ui,rrre. we wi Il subroit t,rr ihE'} v,ri.Edorn |i-. I,he c._lmmilltee as far.
.t
:,
as th_i.Fj provislon is c;oncerned.
l
i
,r,: ', rrtr: p.n orr Lc arrr_.rther gei:!,iirlt. i,irar i;: ;iertion Z0 of
: Hcrisr: .Iii I I I'io - 68 1.4 - I t, app.:i1rsr [ret,c, j n I ine -LO,
" lr:,diviCu.e1s LD hnlcl otber nr-r::i1;ic,rrs ir,
i1
i:1rr:, bank- -" May
',:j,
;r
is l]tc def i tii_tiorl r..tl "rrLh,.r. r.,.ririirittt\E--.?
l(rtc,'w t+lt.:L
I XEp" L,AIIREL- Yes- Gerrt_le_,ma;r frour i/;r_l.err,-iuela. in i:he

r:orruij.Ltec _levei _ ther:e has been arr in3cr'1, j.ort referrine to
l
'l
.l
ollret' })oeiit j_r-rni; .in the b;-tnk. ite i_rei3sar.i.1y neaning key
nariagerial arrd aclv j sory Dr coiiijultant poEttiL-rns.
.,i
I
RllP- Glllll{..il rNI){l . ,1,.r IL iL: r,,F j erir jo. if the term
'.'-'tlr.-,1" i Lr-rrs' .f i,i., r:rrrra;rr I i ar::.
;r rr,oi: l; r'':,rrjif :rrrrJ r-;ther advisory
j t. jr:lll,.r. l,itt--n tct-r r,:11rr11 lcl rtrtJ:, l,:f. nr,., i-i:t,t:f
p(:rF
jj
:.ij::e t,h* qqeFtlOn.
Sc.as:ltjefl'crI]1i]lltI]l-'.li.ltri:.l1i1,l11'll'lj
l
;
!:'rri:i I j,'ir1i ',,]tii1 ,.,t'i r:i,,tr1;r,,J lii ilri ..Othef
lthf,aEe
t.'{ r'i ' 1 ., 1
:l
FIE}] . I,AI7RFI, - 'i'r il . i-lr.:pt I r-.r:t.rtr i,i ',rJj Vaf enzueJa,

lEnt illrrl] .i {lalr'_l .i ilt, 1:,.:i' r11;r111p'L-1 i r, I Lr,,r i I i',i t,, perhape, 1+
41,-/
i 'rr. il. r i.
0i. 1ii
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f)
Attsulir -I tu1ay 18, 1999 5;30 p.m.
iPT_; LTEFUTY SPEA.I.;ER AT]LTEG}
I*EP. LAUnllL, ...trris partic'lm' nrti',ri:ricn i)rlceuse soroe of tre

a;tsi:s ttidt utu:trt t-llt.:ugh tlic hagils oJ'tlle ltdfrlrlt-.ar*v Roarcl a}'ectec{ people
oL iilvolvcd in rranageitrent. 'l..hat is prccisel.y tiLc cotsultants slrd other
tioii,:rriroi oficisi= il ,ri:e

i:ar&. Tlia.r is i;r]31r i-fiier i;rov-isirli is tty-ing io
cover .1a1' pzu.ticrrlar prr,rfuia16. i/Ii, Sp44[4a,
I
FiEF' Gr.-rNirjl-rt'i1)r-r, -5ti i-1" tlir: tirrrr!.; irrr,::riciriit- iiecides to hire a*
,.
: aclviilt,'r df collslrltr:itt his *ristresq, fhe IvT, irl !,: r-/-.i fv l--,tiarc{ sti1l has to Fass
)
liilolr'ihri{ir-r4lilja,:rti.lrirrirl-,,,1-patti.-iil.,ri.iirr]i#riii.-ri
liEF, LAUREL, yt:s, ti,l1., iili:akr:r,, fir,-1tf itllirall ir:om Valengnela, We

1\I.i]1f ir.r gi..r* 11.e.*iliilitt' iir ,,ir,*i,t .iJ::,;
tr-r ilTr-r ri r-.i iri,,r l:j,iltf{i jrist iti case the
F,at'iji,-rlar elfrlr:n l)1.1 f.tirz,',|] l.r, ilri: il':rrlii:'rrirr ir,,rr i/rr1erramela. hapl:ens,
l{!1P. {_lt_t l{I{'l:UiVl}t1 /rli r.irrirl {',}rt1i.i.:i,inq tJrat the Mt)netgl.y
l-!Lrr'!ril,ltij.! l.r4],tittrlnt. iirir rtr.riir f.irr: rr,,llurrit,., trt

ij4ns rillnfl the
r|rralilir,rrtions anrl ili$iil ril ltrir,al i,jt:.r ,r- inilj..riillriis qzh1 nre eleCtetl or
r_t
app,lirrte d Lfi k ! rccr-or,ll ,rr {-}l}}.r.r.- art rJ riisq i:..i lit'1, t}tose founcl un_flt,
.1llfin g olrr pre.wiour :ir:1er1:._r11atio;rs, rF.ri] rrlrllT)(.lr t 1rele:d questiant regarcliflg
t] e p+ssitri-liiv of il:itcaci iliriinS;1
ircrliair i*i rliscluialification to those
i'divici*sl.x *ih,: liav* het:. ii;'rld tri J'rrri, .:{riiunittE.l riaud
ifi t}re
d$ierx ent a'cl operatio'. of a b;_r:rk l_hat
''ia,. liers r,ollapsed i$*teacl of
*rer*ly gir'"i*g a zo-vrar disr.lriaririr:atio. clar;s*, Ili the
past, dre c**tral
l3amk h.as presidetl owet gewersl bzlnks
t_lrat have cloted rhop, Arxf
plc{,:r-rtaliirg to iny :'rtrucet, iire*e lirrrr_ks roilaps*ri iir,:ari.xe
of i* ftaucluletfl
fif ' x::.

l,j
CJAguil ar - 2 May 1B, I99! rr - zru P.lll "
a
w1f l help rrnrjerr-r.i, arr i:l i;h j rr r,aLr..bi,:u.l ar. prlvlslon when we
ment.lc,rr her:e thal Ltr i-,' '.rnr: lfs j-,f the banklng
1,lrr: F--ifr.1.t-:r
sI/r-rtetn that heive l;1;'p,:neii itr tli't .olltl:t y, 6ome of lhe
inrl.iv 1.dual.s f avole,l hl"- f,l-re .l.JrrFti6 ir f a |)anit are no! even
ser)i',r' ,rfficeri.r ritl're ii-rnl< r'i- dir,-=cL,:,r.i:i. Thai ie whv thle
Lrartrir-:ul.ar sent 1.1trr vnes :1lI)F.1. if j.'.1.
REP. GUNItll]NLro - lt'harilr yor.r . Mr. Spea.l<er,, your Honor,
PIy only prc-'bleur hcrre is thir:. Oon$ultant,e and advlserg dc)
not enjoy any line responBibility-

REP. LAUREL, That is correct. Gentleman from'
Valenznela.
REp- GUNIGUNDO- And they merel1' adwise managers and
officers of the bank, and these managers and officers of the
bank have discreilon not to follow the advlce of their
coneu.l-tants and advieers, If that is the ca6e, then why
should we alLow the Monetary Boafd to Ettll pasa upon the
qilallficatlons and disquallfl+ations li lndividuale who w1lI
he hlr,ed as c(lnsultant6 and advisers. coltgiderlinc that lt ls
the directors, the f f icers of the trank that have 1lne
t-.
reepe-,nstb i 1i ty over the day-to-c1ay managemenl of the banklng
institution that they are running?

REP. LAUREL. That is correct, Gentfenan fron Valen-
zuela- Bnt as we mentloned ear.lier, it is the exper lence of
the Central- Bank that requiped us to lnsert this pantlcul.an
provision becau;;e Eome . -- ,/cja
,1{
Fr orr 1)
ffi' 1,,
i
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Ansula - ? May 18, 1999 $:30 p.m.
'I
xc{ulller fhat sorle ba:rk offi.cers and direr,tors operated the banking
ingiiiution. May we lchow frr:ar the clisiinguisired Sponsor how rnany of

thoee bff{< offcetg and djrectors have been charged in court by the
Bangk-o $entral ag Piiipinae or by the former Central Bar:k for fraud so
that they will be accoufltable for tJre coil,apse of the bank tlat they run
eground?
REP, LAUREL. Mr, Speaker, Genflemnn from Valeneuel,a, thie

Representaiiotr is not aurate of ihe lrrrairer* of the cages filed agni+rg1
cf$ce;rs, directore erld etockleoidelc rf halking irrstjtutiorrs with tJrose
I particuiar problems.
REF, GUNIGUNDO, Your Honor, Mr. Speaker. thie Represeatation

asked tfrat qrrestion because we .wrr1t to furd out how effective the
trjlonetery Boefd cafl dixcharge itc rr,vier*,' power:{ rr'*'er the eppointment of
bank o&icers and directors, Because if the3. |ray6 failed to charge irr court
erring bank offirials, fhen trcrr c6fl lrre expect them to be able to revierw
properiv the quqlific-'ations End disquralifig6ljoire of individuels who rrill be
holding key positions in tb.e bank,
REP. T AUREI-, Mt. "!1ieoter, Gentfeme' ftorri voreoeuela. thlg is

precicely a ne.'* Trrovisi'-rn ,cre e;e incorl:or;rti.ng in the General Eaoki5rg
Act-* the porr/ers of revieu:ing fhe qunlificalions of the officers..,/nln
nc: 1n
[:r]jt\
.".:
B{rqprlta - 2 [{rw 18. 199t, 5:3$p.m
(PO - Deputy Speaker Abueg)
REP. LAURET- ...of the officers of the bank preci$ery because
we are concerned.with the protection to the banking public and preclsely
because of ilre experience of the Central Bank in previous ca6e6.
REP. GUNIGUNDO Well, Mr. Speaker, your Honor, irnder filis
particular provision, tfre Monetary Board is supposed to pass upon tre
integrity, experierrce, education and haining, conrpetence and
soundness of judgment for fulfilling the responsibilities appurtenanl to
o flre poslflon of $re banlr dlrector or officer hat ls soeldng confirmalion,
if I may use he phrase;from Ure Moneftary Board of his appointnent.
Now, we do not*wdtttrtre Monebry Board to be vfilmelcal and
capricious in exercising lts review functions as far as secflon 20 ls.
concerned. May we loow wtrat particular benchmark *rould be tF

educafionalathinment or achievement of a fufure director of a board
of
o a banlc? Like for exampre, rf you are an erementary schoor gnaduate
butyou o'vn a mrrflmrilion peso cigaratte factory, wifl you

Efr[ be quarified
to be a bank offlcer or director of a bank?
REp. LAUREL. Mr. Speaker, Genfleman from Vatenzuela
normaily, a bantdng insfihrtion wourd hire an officer or wodd

erect a ttl
,. 00i50 - I
r
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'.1
"i
rf
Boaguho - 2 May 18, 1999 5;35 p.n,
't
direotof fllh llu neeeggery educfi0onal background and erperierce, as
welf as taining. Thls Representalion does not know at the moment if
the ruling before was*E0ll*allowed hat ls, for lack of a proper four-year
college degree, tre business experience can compensate.
So in oher words, Mr. Speaker, Genfleman from Valeruuela, one
cannot justloln a bank witmut he necessary training ancl educalion.
REP. GUNIGUNDO. May we know if Sre Monebry Board wiil be
holdlng hearings to hearopposition from ffre public of tfre appolntnent of
a bank director or officer as far as Secfion 20 is concemed?
REP. LAUREL. Mr. $peaker, Genfleman from Valenzuela, as rrls
Representation understands, it is enough that ttre bio_data of a
candidate for any position in the banking institution is subrnifieet to 0re
central Bank, and flre departnent concemed reviews Bre bl+.dah or [re
cuniculum vitae, and detennines if he person outng coneldered le
qualified or not. Bul ffris Representation is not aware of arry hearlng

which normarly shourd be done
- the screening process shouH bo done
by he banking institutjon.
REp. GUNTGUNDO. So if that is the way tfre Monehry

Board is
conducting the review of the quarifications or diequarificau0ns of
,K
00,'5J
r1
.l
.l
I
I
I
.I
t:j
Eongulto'? Mry lE. 1999
i.i l:35 p.m.
!i
i:i person, how can the public Inform fire Monetary Board
r.?
of infomralion
.1
t,i
l that would disquatify an individuat from assuming the posiflon of drector
,j
i
,,1
or officer of a bank if it does not conduct any hearing and merely
..iL
I
,l peruses or conducts a table examination of the
l cuniculum vihe of trat
:l
,ri
,i
particular individual?
' would lt be more prudent if the Monetary Board should preseribe
a procedure that will be more transparent ancJ the public may partclpate
ilrerein so trat in case they know of any criminal or civil case firat
would
affect the integrity, the competence and soundness of judgment of an
individual, ffn Monetary Board can be properly notified...
jfit 5E
.' ,)'
[.,\
l' .i
BRACIA-2 Mav 18, I99c) 5:40 p.m.
(Po-Deputy Speaker Abueg)
REP. GUNIGLINDO. can be properly notifiod of such
information?
requirement may not really be ncessary because there are many applicants
in the different banking institutions. If we consider that there are 1,000
banks and there are many employees in each bank, it will be too
cumbersome to requiro public hearings. And besides, Mr. Spsaker,
Gentloman from valenzuela, there are clearances required before any
person is employed in,any+position in a banking institution so trat if there
ax any cases tlis should.appear in the clearances submitted to the banking
institution.
REP. GUNIGUNDO. Does this mean, for examplg Mr. Speaker,
Your Honor, that in cdse this Representation decides to put up a bank
together with some of our colleagues, bofors wo register with the securities
and Exchange commission we must submit our curriculum vitae

to the
Monetary Board before we can go to the sEC so that this particular
provision can be complied with? or does the review come in onry after trre
appointment has ben made, after the company has

been organized or the
0il' 53
i.; iJ n -r-
BRACIA-2 May 18, 1999 5:40 p.m.
bank has already been registered with the appropriate agencies of

govenrment?
REP. LAUREL. Mr. Speaker, Gentleman from Valenzuela" this
Representation recalls tlat when organizing, say a rural bank or a

commercial banh it is the organizers who are being screened by the central
Bank after which ttre employees who will be hired are screened by the
institution that will hire them. only in this parficular section the matter of
submission of cuniculum vitae or application forms refer to the senior

officors and the different other partios that we discussed oarlier.
REP. GUNIGUNDO. So, one final point. we are trying to give the
Monetary Board the authority to prescribe, pass upon and review the
qualification and disqualifications of persons who will be elected or
appointed as bank directors or officers. At what levsl will we include all of
these oIficers, is it up to the position of assista't vico-presiden! branch

manager? Can you please give us som explanation as up to what point or
up to wlut level will the Monetary Board review the appointment of ofrcers
ofa bank?
REP. LAUREL. Mr. Speaker, Gentleman from Valenzuel4

this is
fiom the levei of manager.
(r0,'5,i
CABANOS - 2 May 18, 1999 5:45 p.m.
(PO - Depu$ Speaker Abueg)
REP. LAUREL. . , . to envision two existing financiar institutions that
would be married. lf it happens that both institutions have the maximum directors,
or 15 per bank, when we marry them off, the provisions of the New General
Banking Act allovvs both 15 directors to sit in the merged institution. In other
words, allowing 30.
REP. GUNIGUNDO. l'hat is precisely the question, Mr. Speaker, your
Honor. why are we allowing a consolidated or mergecl bank to have as many as
30 directors? will this be a permanent arrangement or are we going to prescribe
a period of time within which they should reduce the number of diregtors of that
particular merged bank? Because there being more than 1s board members
will
be so unwieldy, that, probably most of the resources of that banking institution will
just be spent in paying ofthe salaries, per diems and allthe

benefits ofthose 30
or more members of the board of directors of that particular merged or

consolidated bank.
REP' LAUREL. Mr. speaker, Genileman from Varenzuera, there is reaily,
in this pirrticular case, an incentive for institutions to get married

or to merge. ol
course, the more imporhnt"issue here is, in order to strengthen the financial
institution. lf you marry two, it becomes a bigger bank or
instiMion. We also
should assume that the present directors in each
bank are entifled to sit in heir
boards because of their omership of shares.

we arso have to consider that they
are receiving per diems where they are. So

that, it is not very easy, Mr. Speaker,
00r 5,ti
0 561
CABANOS.2 May 18, 1999 5:45 p.m,
to get rid of people from two institutions when you merge them. 0f course, the
Gentleman is conect, it becomes a little unwieldy
Normally in the progress of the marriage, which takes time, there are many
ways of accommodating the new directors of the institution. They could reduce
the number of directors, at the same time, they may create positions, like
consulbnts. or they can have special committees to allocate seats to he

different directors, or to the 30, as the example was given, 30 directors into the
new surviving institr.rtion.
REP. GUNlGUNDOiiuWelhmy only worry there is that, if the number of the
board of directors is 30, wtricn is an even number, in case of a tie, what will
happen?
REP. LAUREL. For the information Mr. Speaker of the GenUeman frdm
Valenzuela, it is very rare in banking institutions to be voting in order to anive at
decisions. Normally the banking institutions or the board of directors of the
banking institutions are very close to each other, it is very rare that you have
board of directors who are antagonistic with each other or fighting each other.
That's a very rare situation, Mr. Speaker.
REP. GUNIGUNDO. Although itisa

o rare occasion, it maystilt happen. So
what will be the options that are available in order for a deadlock to
be broken?
what can be done in order to avoid such a situation? Because, if the
answer was;
"lt will never happen.", we wiil no ronger foilow
up that question. But you said, 'it
rarery happens", so it may haprren in the future
and we are just urcnied that in .
p
/
00.5i'
f l '' :
BRACIA-, May 18, 1999 5:40 p.m.
REP: GIINIGTINDO. From branch manager all the way up to the
offioors ofthe headquarters ofa bank?
REP. LAUREL. That is corect, Mr. Speaker.
REP. GUNIGTINDO. Okav. l.et me go on ro Section 21, Directors

of
Merged or consolidated Banks, It appears here that rhe limit
on the number
ofdirectors in a corporation rvhich is. according to the corporation code is
l5 individuals shall not be applied so that the membership in ttre new board
may include up to the total number of direclors provided for in the
respootive articles of incorporation of the morging or consolidating

banks.
May we know what is the rationale behind this particular provision?

o
REP. LAUREL. yes, Mr. Speaker, Gentleman from Valenzuela.
As
mentioned by the Gentleman from valenzuela there is a maximum

of 15
directors per corporation. We have to envision ...
00r 5u
May 18,1999 5:45 p.m.
case that happens it might affect a huge portion of the banking industry, especially
if what we are talking about is a very, very large bank. Like for example .. . /atc
J
00," sej
056
F,1
t ,"?,
SANTOS.2 ilhy lE, 1S9 550 p.m.
PO- Dcp.$peakerAbueg
REP. cuNtC{JNDO. . . , . illcs for orampb, Mefo Benk q Eqrdtailo flld

PCI Bank. ln lhd slhaton, what wllt happen?
REP. !.AUREL. We[, prfiaps, Mr. Speker, the Gcrilcman fronr
valemueh wlll appreclete whatthis Represenffion is tying to say. Normelly,
most of the declelons made in banking boards have to do uffir loenc, ard a
banking Insd$uon cannot really anord to dilydslly vrhsr trcy lpnk d

applications for loane. And, normally, the directore wlll come up rrrdor somc
solutions accopbble to eveD/on6 becauso it is lhe business of the bonorYer tiat

is concerned. And of courss he bankino imfltufion ls abo concemsd ffi
they should be able to ssrve their cllents and thelr clienls cannot be mrdc to
unit othenrlso ney pay transfer to another bank and thsrefiorre ffi bank wltl
loeelhe valued cl'pnt. so, it is really almost imposrlbh to haw e ddloct( In
a banHng board, Mr. $poaker.
REP. GUNIGUNDO. Thankyou, yourHonor, Mr. Speker.
Lt me move on to anolher secfion, $at lB Scdon 22, Co*rpmsdon

and offier Benenb of Dhctors end olficers. According to thic pmdobn, whcr
a benk ls urder comptouershrp or consn&.Ehrp or when tre Mmrbry
Board fids hat tb b.rt$hes,beffi conducdng ltr h.nlnsl h rn rm& or
unsound mannsr or-lnaftunfficbry finendel wrdl[on, thc Honmy Eoerd
may reguhte 0re paynrent by the bank to ltB dlrrenorl md ofrorn of
oompehss[on, allormne, feee, bonuses, stock
opsons, proflt sr]rrhg
%,
oo,'Sir
O
L?iJt
fi\ a\
I'
SANTOS -2 Mey 18,1S0 Sl0p.m.
fringe benefib. will the dlefingulshed Sponsor be wllllng b accept an
amendment that after the words finge bendlta" ws also lnsft of rdd ftr
phrase OR SlMll-ARSCHEMES, DEVTCES OR ARRANGEMET{fS?
REP. LAUREL. Mr. Speaker, Ciendeman ftom Valenzuela, at ttre
proper time vre vrlll seiiously conslder the srggsflon.

REP. GUNIGUNDO. Okay, thank you, your Honor, Mr. Spealer.
Let me movs on to Sec{on 23, prohlbltion on publlc Ol[dab.
Accodlng b thb particuhr provislon: 'No appolntiw or elecllve Brblh ofrtdd
wheorer fulflmc or pert-tme shail at rhe sams tme se.vs er dilcer of any
t private bonk rcpt In.ceffs-shers $uch soMc 16 lrEldert

assishnce. . .', ebdsra.p*ruWlll*fie dMryulshed Sponsor, etthe properthne,
b flnnt$l
accepl also an arrand rgtrtsfrtm'tHs.Reprcentafion to the erffirct that tfdr

appointive or dcc{w p,rbtb oftlctat SIKIULD ALSO NOT SERVE AS A
DlREcroR lN AllY orHER cApAclw lN Tt-tAT pRtvATE BANK. aetde trom
being prohlblted frorn occupyfng the poeiffon of olllcel?
REP' LAUREL. At the proper trre rrb Rcpresendwr r,fn radorlsry

consider the cr.Xggooflon, Mr. Specker
REP. GUNIGUNDO. Thank you, Mr, Spoeker, your llonor.
Let ms procsd to Secflon 25. lr&ry vre larow, Mr. Speatrr, yqr Flomr,
what ls the deflnltion of "non-allled entcrprka?
REP. LAUREL. yes, Mr. Speekcr, "non-rlligd enterprbcf rtrr to

' buslnessea lhat sre not connec'tod wltr bsnldng, main\yrgz
I7frf
i: l
SANTOS -2 Mry 18, 1000 5g0p,m.
REP. GUN|GUNDO. tuid may rre larow udnt is thc ddlnidon of ld[sd
entorprisos?
REP, l3LlREL;.,i,*Wdlrpllicdcn0e]prh.sj d$cd to frrc benktrg hrnlneo

but there are epec#lc erru,tlrd ae ldendfled as alllod . . .
X2
3 /li ^ r-t *
,,,r:0.1j
a ' 1)11
",/_ Ld \",/ |
f^\
MALIWAT - 3 May 18, 1998
(PO - DEPUTY SPEAKER ABUEG)
REF- LAUREL - but there are spectfic areae that

are identifled ag aIJ ierl. Fr_rr-. instanee, conmercial bankE
are a.LLIerj. In c-tther w.Jrds, a commel-r)Ial bank may 1nve6t in
anoth,=r cormercial l-rarrk hrecauee i.t i,q allterl, 1t 1g banklng;
thrift banke, a.Lars r'ur.al L.ranhs, lnsurance aompanleg,
coeperative tranks, ventur.e rjapital r:orp;rationE, leasing
cornpanlee, lnvestrnent hcrrrpe..r, finanr:ing comp8.niea, credit
carr,l 66pp6nlee, flnanr, ja_l jnr:t..i tlt,J r_,ne (:FJlerlng to emall and
medium eca.Ie lnchrei:r I eet Iike ven.br_rre, capitale, companiee
en{,a{ed irr forelgn exc:hange deale7e;hi p, or brgkerage - There
ate all-ied uncler.takings; or enterprises th&t are non-
aLg,rt
f inancial like warehc.-,uing, BLoraEe, safe depoeit boxes and

many more ,
- Spea.ker; Gent f eman frr"rrn Valenzue la.
Mr
REP- GUNIGUNDO. Thank you. your Honor and Mr- Speaher.

Let ne conmen.f the dletlnguished Sponsor fon going out
of hie vray to deflne -- the definitir:n o-i .financial aLlied
enterpriseg. and rnon-flnancial ;Llf ied unclertakl-ngsr ,
becauae ln the origlnal vereion of Houee Bill No- 1160 there
1s no definitlon or there is not even any effort or attnpt
; to enumerate end deflne the definition of those trdo terne-
But may f suggeet, Hr.. Speaker, your Honor, that aelde frorr
definlng what are frnanclar alrlecl enterprlee and non-
financial allied undertaking ie, pro?:attly we ehould alao
eneak in a deflnition of r,rhat an allied enterprlee and what
a non-allied enterpriee meanB, so that we wirl not encountei,
any difficultv in the lnterpretatlon of the ]lmltatlone
r
on
UAT,II{AT - 3 linr, '18 , 19!ti:1 5:55p.m.
the actlvit Les, i.nvep,+nente of a unj_versal bank and all the

,rther kinde r:f banks that are ex j,st j ng at the present time _
REP- LAUREL- Yee, l4r - Speaker. Gentleman from

Valenzuela, at the proper time we will accept any
suggestions in that connectlon from the Gentleuan from
Valenzue la -
REP- GUNIGUNDCI. It aleo appearg here in Sectlon 26,

llne 27 that the equitv investment in any one enterprlEe,
whether eLlled or' non-allied sha.ll. not e-liceed Zf.z of the net
worth of the bank. Wound-nt 1bfr be a more prudenti.al level
than 25%, because thls might be too large for a bank to
place lnveatlrent ln Bn al1Led or non-alLied enterprlse?
REP. LAUREL.Mr, Speaker, Gentleman frorn Valenzuela,
thle percentage wae etudled very carefully by the epecla]
conmlttee that wae requlred to etudy the General Banklng
Act, and thie percentage withln the acceptable levela erhich
Your Corulttee approved.
REP - GUNIGUNDO. Well, it may be acceptable, but 1e lt
prudentl al ?
REP - LAUREL - I believe so, Mr- Speaker, Gentleman frorn

VaLenzueLa.
REP- GUNIGUNNO. Fecause we woulci rather be more
coilaervat1t'e tlran be t.Lro adventurou* 1n Jacklng up the
a-L1owfib1e e.\posureF L1f equlty lnveetment,e ln atlled or non_
al11ed undertakings of a hrank. especiafly a unlveraal
bank.
REP. LAUREL. !tr- Spealqer', let rne aus'une the
Gentleman
fron Va.lenzuela rat the corullttee dItJ not flnd thle
ae an
00.61
q-') r.l
MALIWAT - 3 May 18, 1999 b:bbp.ur- 3
adventuroue figure. It has really been serlouely studled

and coneldered.
REP - GUNIGUNDO- Finally, in Sel:tion g5, there ls a
prohihilion for a ban} not to directly
{
0
00'b:l'
/.::\
Cejes.3 Mav 1E, 1999 6:00 p.m.
(PO-Deputy Speaker Abueg)
REP. GUNIGUNDO. ... for a bank not to directly engage in the
insurance business as lhe insurer. But in line 32 of pagp g where seclion 26 is
written, it appears here that insurance companies are included in the term
financial allied enterprises and a universal bank may invest therein. can you
please explain to us whar is the interplay of these two provisions, because I find it
inconsistent? ln section 85 we are prohibiting a bank from direcdy engaging in
the business of insurance, but here in section 26, we are allowing investment in
an Insurance company.
o REP. LAUREL. Yes, Mr. Speaker, Genfleman from Valenzuela, the bank
cannot b an insurer but it can invest in an insurance company. In other words, it
has to be a different corooration.
REP. GUNIGUNDO. So, what we are saying here, your Honor, Mr.
Speaker, is that, for example, UCPB, United Coconut planters Bank, cannot
directly engage in the insurance business, but don't they have the cocollfe
fnsurance Company,wfti6h.is a sister company ol IJCIB?
REP. LAUREL. yes, but Mr. Speaker, Gentleman from Valenzuela,

as we
were saying, it is a difrerent corporation. lt can invest in the insurance company

corporation, but it cannot insure direcily.
REP. GUNIGUNDO. So, what would be the exposure

or the ceiling of the
exposure for investments ih an insurance company?
n0 ^rJ
Cejes-3 May 18,1999 A'ftn n '}'
REP, LAUREL The exposure to the bank wilr

onry be up to the exrent of its
investment in the insurance company that they are investing in.
REP. GUNIGUNDO. So, at the present setup where Cocolife and UCPB
are sister companies, there will be no viofation of section 26 and section E5.
REP. LAUREL. That is correct, Mr. Speaker.
REP. GUNIGUNDO, Let me proceed to another section, Seciions 27 and
28. can you please exprain to us the rationare behind sections 27 and 2g?
REP. LAUREL, ,yes, Mr. Speaker, Genileman from Valenzuela, this
section 27 allows equity investments of a universar bank in

[a] financiar ailied
enterprises. ltcanown l000,,6ofathriftbank,orarural bank, orafinancial allied
enterprise. However, it can onry own up to 600,6 of the voting stock of a
commercial bank or of another universal bank, Mr. Speaker.
REP: GUNIGUNDO. Does this mean, your Honor, Mr. Speaker, that a
universal bank can invest in a real estiate company or be a real estate developer
at the same time?
REP LAUREL. This particurar section does not mention a rear estate
enterprise. However, they are probabry ailowed, Mr. speaker, to invest ,

in a real
estate..../MVC
0{} ^ 51:
REGODON.3 May 18, 1999 6:05 p.ru
PO - (DEP. SPEAKER ABUEG)
REP. LAUREL. . . . to invest in a real eshte.
REP. GUNIGUNDO. yes, I think so, because under Sec,tion 2g, ,A
universal bank can own up to one hundred per cent (100%) of the equitf of a
non-financial allied enterprise. And will you agree with this Representalion that
ral estate development company can be considered as a rlon-financ-lal allied
enterprise?
REP. LAUREL. yes, Mr. Speaker.
REP. GUNIGUNDO. So, would not that consume a huge portion of the
cash flovv of a universal bank considering the glut or the slump in the real estate
buslness at the present momenf? Might not that trigger ofi a bank run lf we allow
a universal bank to invest 100% in a real estate development company?
REP. LAIJREL. Mr. Speaker, Gentleman from Valenzuela, what ts
envisioned here is not really 1000,6 of the capital or the funds of the universal
bank. There are ceilings as to the amount that the universal bank can invest ln an
allied or non-allied undertaking.
REP. GUNIGUNDO. Mr. Speakr, your Honor, let me conflnue.
I was brolrcing over section 26 and it appears hEre that a ingurane
agency or an insurance brokerage is also included as a non-financial allied

undenaking. ln Secdon 28, ? universal bank may o$/n up to one hundred por
cent (1@%) of the equity in a non-financiat atied entarprrse..

rf fret rg the
situation, if a bank gets hord of 100% of ihe equity of a non-rinancisl
ailled
enterpdse, although rt does not o(ceed
the c.ilrng ot 25% of he net worfi of tr
Ol ^r. "
I'
REGODON.3 May 18, 1999 6:05 p,m.
bank, then it will be violating sec{lon 95, which prohibits a bank ftom dlrecty
engaging in the insurance business.
REP. LAUREL. Mr. Speaker, (does) the Genileman from Valenzuela say
that a bank is investing in an insurance company .1000,6?
REP. GUNIGUNDO. Yes, Mr. Speaker, because that is the stabment here
in section 28 - -"A dniversar bank may own up to one hundred per cent (1oo%) of
the equity in a non-financial allied enterprise." so, even if, for example, cocolife
whlch ls a dlfierefi company, relaflvely speaking as lar as UCpB ls concemed,
the moment ucPB acquires 'lo0% of the equity of cocolife, but it dos not exceaJ
the 25% net wonh of UCPB, ii may not be viotating sections 26,27 and 2g but it
will beviolating Section 85 of this proposed measure.
REP. LAUREL. Mr. Speaker, Genfleman from Valenzuela, SeoUon E5
prohibits a bankftom dhscdy engaging in insurance business

as lhe insurar but it
is not prohlbited ftom Invesfirpin a corporatlon that is In the insurance buslnss.
REP. GUNIGUNDO, yes, that was already explained . . . /edr
flA^ +,:,'.
$,
DOMINGO - 3 May 18, 1999 6:10P.M.
(P.O. - DEPUTYSPEAKER ABUEG)
REP. cUNtcUNpO. ...yes, that was already explained to this
Representation a few minutes back. But the point here is this

- in sec,tion g5,
the bank shall not direcfly engage in the insurance business as
the insurer. But
in the situation that I just relata to the distinguished sponsor of the bill,
what if
ucPB invest 100% over all the equity of cocoLIFE, will it not be violating
Section 85? Because COCOLIFE, definitely is engaged in the insurance

business.
REP. LAUREL. Mr. Speaker, Genfleman from Valenzuela, the ansvyer

is
no, there is no violation because it is a difierent corporation.
REP. GUNTGUNDO. yes, sir, this Representation understands that
cocoLlFE and UCPB are two different corporations because it has a different
composition of stockholders and officers and directors. But the point

here is this,
what is lhe use of prohibiting or putting this prohibition in section g5 when

a
universal bank can at any time invest 1 0006 over the 100%
equity of non-financial
allied enterprise which incrucres an insurance company, an

insurance agency or
brokerage l think the reason why we are prohibiting banks
to directry engage in
the insurance business is to avoid a financiar crisis
as far as fte bank rs
concerned where it wiil be erposed reft and right

to rife insurance and property
insurance coverages and it rvill unduly affect
the cash flow level or condition of
that particular banrc Definitefy, as far as the
corporation code is concerned, we
are dearing with fwo banks
- we are dearing w*h two entities, But
the pofnt here fs
this, section 85 wiil be a useress prohibition
or useress provision o"""rffik
,W Y
I nO^fil \\
DOMINGO - 3 May 18, 1999 6:10P.M.
2E allows the investment of a bank * a universal bank in a non-financial allied
enterprise which includes an insurance company,
REP. LAUREL, Mr. Speaker, Genfleman from varenzuera, the Genfleman
from Valenzuela should not be worried about the exposure of the universal bank.
To begin with the universar bank is a hugecompany 100% invested

- 100% of
the corporation - the insurance corporation that we are discusslng may be
insignificant as far as amounts are concerned so that the cash flow and the
business of the bank may not be affected even if the insurance company does not
succeed in iF business.
REP. GUNIGUNDO. So, what we are saying here is that, a bank will not be
I adversely afiected in case the insurance company collapses. So, may we
proceed, Your Honor, Mr. speaker, to Section 30 0f

House Bill No. 6g14. May we
know, Mr. speaker, what,is the existing limit on equity investments of universal
banks in quasi-banks?
REP. LAUREL. This, Mr. Speaker, Genfleman from Valenzuela, this is an
old section. This has just been retained.
REP. GUNIGUNDO; Well, Mr. Speaker, your Honor, with all

o we are not asking if this is an old provision, what we are
due respect,
asking, your Honor, Mr.
Speaker, is what is the present limit...lmvd
7
{1 i .l
Mlluna May 18, 1999 6:15 p.m.
(P.O. - Deputy Speaker Abueg) '
\ REP. GUNTGUNDO. ...what is ttie present rimit on equitlr investments of
univerEal banks in quasiubanks,so that we can get a ligure?
REP. ISUREL. Mr. Speaker - Gentleman from Valenzuela, there is a limit
at lhe moment of 40% ownership.
REP GUNIGUNDO. Thank you. So! if the Monetary Board can further
limit the equity investments of universal banks in quasi-banks, can it al the same
time reduce the limit on equity investments of universar banks in quasi-bdnks?
Can the Monetary Board reduce the limit?
REP IAUREL. Mr. speaker - Genfleman from Varenzuera, this section
o 30 allows the Monetary Board to further timit equity investments of universal
banks in quasi-banks.
REP. GUNIGUNDO. May we know, your Honor, what is the reason for
the limit? | don't even know what is a quasi-bank. can you prease define to
us
what is a quasi-bank?
REP. LAUREL. Mr. Speaker, there is a definition of quasi_banks in
section 3 under definition of terms. Letter. (b) says: ,,euasi-Banks

shail gefer to
stock corporations organized under the phirippine raws
and arfhorized by the
Monetary Board to engage in quasi-banking functions."
of course, the definition
is not too crar' However, in Section @ it indicates what are quasi:banking
functions. which as defined shat mean 'borrowing
funds from othEr than deposits
from the public at any time for the
borrowe/s own account throuoh tho i.o,,o,,.-
o
Mlluna May 18, 1999 ' - 6:15 p.m.
any kind which instruments shail be known as

deposit substitutes for purposes of
relending or purchasing of receivables and

other obligations.,,
'
REP. GUNIGUNDO. Thank you, Mr. Speaker your
- Honor, for calling my
atiention io the definition of what a quasi-bank
is as it appears in sec{ion 3 of
House Bill No. 6814.
Before I move on to another chapter of this House measure, my

understanding of a bank is that it is supposed
to be as tiquio as possibre in order
to service its customers and crients so that
in case funds are needed by their
customers, their depositors, they can easily
release those funds to thE
withdrawing depositor. And beeause of such basic
objective of a bank, we shourd
o be very, very conserv'ative as far as limiting

the ... /mll
nl
'lt'
{'r i .1
LEDESMA. S May 18, 1999 6:20 p.m.
(PO - Deputy SpeakerAbueg)
REP. GUNIGUNDO. ...rimiting the investmenb that a bank can engage in. I
think that is the very reason why we went through the efiort of defining what an allied
and a non-allied enterprise is and what a financial allied and a non-financial allied
enterprise is all about. My problem here is this, if we allol a bank to ongago in non-
financial allied undertakings, because I think when we talk about non-financiat alliod
undertakings, we are refening to companies ffrat will corisume a malor portion

of fte
bank's cash flow and it will tie up that funds to those institutions that are considersd as
non-financial allied undertaldngs for a long time and it will take a tong dme for thet
banking Instifirtion b liquidalertheir equity inve$rnents in hose insttrtons in case
o there is a need to cover ilre much-needed demand for withdrarval of funds from its
clienb and depositors. so, wouldn't it be better if we just limit the equfi investnenF of
banking insfifir$ons to financlal allied enterprises wtrich basically deals wltr instihrtions
that will not tie doarn for a long time the money of a banking insliftrdon, instead of
simply opening the entire field to all kinds of invesknents to all of theee classo or
categoric of banks?
REP. LAUREL. Mr. Speaker, Genteman from Valenzuela, that ls a conect

statement. In fact, at the present, rural banks, for lnsbnde, harre limlbfions
as b whr
their funds should be lent out, so our thrift banks and so
our cooperative banls but he
mission of a banking institution is really to bring the money
rvhere it ia nesdcd. That is
why in the case of universal bank, which is the bigger

insfitution, it b allfi,d to lend b
as manv or to invest to as many corporations so
that it courd reach he peopre thd n%0
LEDESMA. S May 18, 1999 6:20 p.m.
the money. So, il's really expansion of the business as far as tre blgger banks are
concerned.
REP. GUN|GUNDO. I see. Because lthink ttrere are nwv existing guldslins
from the Mon&ry Board that would restrict or limit fre oposures of banking
instifutions as far as lavus are concemed lo certain high-risk ventures. Like for example,
at the present time, banks are not too keen in lending to real esHe developers because
of the glut in the real estate market. And if we will simply put ceilings on the ec,posure
of banks in non-allied or non-financial allied enterprises, it might create a sitration
where banks will find it difiicult to liquidate its equity investments In this kind of
institrdion. And as a result, we will be facing a curency crisis just like the rest of the
neighboring counties that we have here in the Asian region.
REP. LAUREL. Mr. Speaker, Genileman from Valenzuela, elgerbnce has
shoivn that as long as ,",ra_],.t
o
420
'cJAg,-itar - - {. '' May 1.8, 1999 4.95 n a
(Pit * Deputy Sliea.lrer At,uetl I
RtrP--_IAU-REL ar 1..:rrg ar the altowable 1lnlts are

nDt -'l]:(reeL-led. the Liaiiks have nrl riquicllty problems. In
fir,:,1., 1..]i1-1' -1re Vr:f l,r 1i,1t.rid tt,,v,'. ri:I, itai,r, elci mUch mOney. SO
we ar.i) t:t ;',:a I Iy {- i,}Ir-.et. Hd ahrLr f. i,.he-: F,nobf em that the

Genl:leman f r.,..rnr VaIen:ur.;la i * t,li j rrjrirrq.
ItlIf'. Gt]N I {ll-ll.lJl1:l - yes. I thi nl.t :rr, j-,,rr-ause even durlne
ihis economic cr.i si s, it is rrnly banlis tirat are earning a
ltit of noney, ccnparerl to the rr:st nf the nation- It is
':n.l.y Lhe banking j.ndustry t.hat j,s n.rking a killine even In
the:;e times of econorn.ic crleis - And we see so marry
unfortunate situations where banks are tL.o anxi-ouB to pull
Dut rnortgaged .rehir res that ha'e bet,;n i r-r arrearB f or onlv
tqo monthe. And $o Inany 1ega1 officers of banking
insbitutions refuse to wai'e theil' attor.ney's fees or legar
fees even though the banking offi,:er ]l.is already acceded to
t,he request of the nortgagee o}' the mortgagor to walve
surcharges and penalties chargeabfe to the account of the
ln(ll,tgagor', the debtor, the owner of the motor veh1cIe.
My only problem with this Farticul.ar section and
with
the rest of the chapters that deat with cornmerciaL bankg
and
the other kinds of banks over what liind of
flnancial
unciertak.ings they can hanrlf e is that we are
too I iberal in
treatlng a1l of these kinds of investmentB
that banke are
naking. And I dlstinctly recall that in
the case of Banco
il:\
C"lAgtt.i 't ir'; * 3 l{rr1,' ',i.}. llilll rr . al, H. ul.
Filipino - one of the reasons that p.'al,.ecl the way for its
clr:::ure is that i t over]iP(rsecl j ts,:.1. f in real esta'te
- And ae a result, i L enrountered cash f .Low
der,'elopment
problems wit,h i-tE cu6t.rners and cl. j.errl-s. This io .luet the
very reason why this Representation Etrongly urges thg
distinguished Sponsor to consider lirniting the playing field
of banks as far as equity investments are concerned in non-
financial and non-a] 1ied enterpri.ses.
Let me move on t.r ahn+ hFF hîht- LeL me direct your
attenticln tr: S,--ction 4.{ of Lhj.:1 part;icu,Lar meaaure. May we
know. Yo r-rt- I{oncr, Mr. Speaher. in r-:ase c.t. conf lict betweerr
thiE HouEe bill and the other prorrisions of law, speci-
o fically RA Ntr. 7906, RA No. 7353. RA No. B9SB, which law or
which prr:vieion will prevail ir"i caee of conflict? Ie it
this House measupe o:' will those previous laws prevall?
REP. LAUREL - Mr- Sp''s6ker, may f ask the Gentleman from
ValerrzueLa to repeat his .tuestion pfease. ,/c,ja
vln.
Ansula - 3 May 18, i999 6:30 p.m.
{PA DEPU1Y SPga.!.,ER .a#uEG)
REP. LISUREL. ..,to repeat his question please?
REP, GUNIGUNDO. t1lris ir the tluestion, Mt. Speaker, your Hoaor,

before the Majority Floor Leacl-er ask for ihe e'spension of our
interpellatione in case of conflict tretrr.r*en special lawe sfld the
-
General Bar:king Act that, l{re Bre delil:erati'g oil. rnay we knmr which
law will prevail?

-{"a""nU
REP. fftffffit+?{Eg. lb1r. Spenker. {-:en'J_-nan from Valenzuela, in
case oilcorrflict. it is ttre st:eciari iaui tirat urjli alpir.,

"
REP. GI-TNIGI-iND{} E*t ic it nt:t e hnsir, Frinciple of statutory
cDnstruction that tlre Later. lafir ptevails r]ver ;1 o1r.l law because the later
larrr has hcen tletberat*rJ n' n-fter ttre oiti inq, irag been in exigteace for
sometirire antl. tl e ne. lew co'tairx iertai,, litovisions that had been
rleiil:erated rrn to anklress the prexen*. conditic:.re and eituatious fhat it rs
supEosed to coteci. acleiregs atrrl take care oi?
REP, LAUREL, Mr, Bpeaker, Gentlernan from Vals:euela, it ir so

gtatecl in this bill that it wili be ljre sirer.iai iarqr that wiJl apply.
REp, GUNIGUIIDO, precisel-.v tjrat is the point that I am driving at,
woulci't it be better trrai hr case of co'rrict. trre new Gene,tar Banlcius
Act should previl orrer the *pecial raws f-rxat pertainr to
thfift baflrfl.
fufar banrcs' coopetative barilee and isla''"ic banks because
it is a rtruch
later law?
a
ff
1:-
/1
Ansula - 3 May 18, 1g9g 6:00 p,m.
EEF. l-AtrREI.. Wrll, I{r:, Speaker, t}ie Re,presentatioil ie not e
laurver. Ferhaps t}re Gettleman...
f}IJSpRNSION {ltr fi}rssloN

THE DEPIJ'TY spE .I{ER (ReP. Alrr_reg). 'ttre sessi(x! is surpendec
with the liermieeion of botjr the {-1a111[prl t]i-,.
ft ilJrr"s 6j.13,p.il,
ooqji,
Bo4gnlto - 3 Mtry l1l, 1999 6;35 p.m.
(PO - Depug Speaker Abueg)
RESUMPTION OF SESS]ON
At 536 p.m.,lDe secsion ums resumed.
THE DEPUTY SPEAKER (Rep. Abueg). The session is
resurned.
The dis$nguished Sponsor may now reply.
REP. LAUREL. Mr. Speaker, Gen$eman from Valenzuela, at the
proper time, tfris Representation will seriously consider the amendment.
o REP. ROXAS. Thank you, Mr. Speaker.
THE DEPUTY SPEAKER (Rep. Abueg) The detnguisfnd
Majority Floor Leader.
SUSPENSION OF CONS]DERATION OF H.B. NO,6614'
REP. ROXAS. Mr. $peaker, after consdliqg wlh fre

distinguished sponsor of the measure, as well as he ilistrqr.ilehed
o Gentfeman from Varenzuera, may I ask ffrat we temporarrty

zuspend fre
interpellation and consideralion of the measure_
" THE DEpUTy SPEAKER {Rep. Abueg). Any obieclion?

($ilence) The Chair hears none; the motion
is approved.
,'(
Distinguished Majority Floor Leader.
a
{l
Mlluna - ''
July 12, 1999 4:4Ap.m.
to the Bicamerar conference commiftee to reconcire

disagreeing provisions
pertaining to House Bi' No. 7612, arso known as the Anti-Dumping Biil.
Accordingly, Mr. Spbaker, may I nominate the following

to form the
House contingent to the eaid Bicamerar conference committee: The
Honorable Marciat c' punzaran, Jr., the Honorabre

Herminio Teves, the
Honorable, Joey Sarte Salceda, the Honorable Rolando Briones, the
Honorable Danny suarez, the Honorable Angerito
sarmiento and for the
committee'on'RureeitftsHonorabre-saracnib Baterina;
and for the minority,
the Honorable.FelidffiBUtltonte.
I so nominate,and calt for their efection. I so move, Mr.

Speaker.
THE DEPUTY SPEAKER (Rep. Abueg). Any objection
to the
nomination? (si/eace) The chair hears none; therefore,
the nominees are
hereby declared elected.
THE DEPUTY SpEAKER(Rep. Abueg). The Majority Ftoor

[.eader.
CONSIDERATION OF H.B. NO.6814
Continuation
PERIOD OF SPONSORSHIP AND DEBATE
REP. ROXAS. Mr. Speaker, at this juncture,

may I move that we now
continue our consideration of commiftee
Report No.,206, submitted by the
commiftee on Banks and Financiar Intermediaries
regarding Houce Bit No.
6814. For this purpose, Mr. speaker,
may I ask that the secretary Gencraf
be directed to read the tifle of
the measure.
0,itl: j
a
08
I .. -ri
':l
REGODON.2 Iuly 13, 1999
PO - (REP. CAYETANO)
RESUMPTION OFSESSION
At 5:21 p.m., the sesslon wss resurned wlth Rep. Afien peter Cayebrc
presidin}. .!
THE PRESIDING OFFICER (Rep. Cayetano). The session is resumed.
Majority Leader.
SUSPENSION OF CONSIDERATION OF H.B. NO.6814
REP. GONZALES (N.). Mr. Speaker, I move that we suspend.in the
meantime consideration of committee Report No. 206 containing

House Biil No.
6814. I so move, Mr. Speaker.
THE PRESIDING OFFTCER (Rep. Cayetano). Any objection? (Sdence)

lf
none; the deliberations are suspended on the said bill.
REP. GONZALES (N.). Mr. Speaker, may I ask for the recognition of
the
honorable Gnileman from the second District of rarrac, the
Honorabre Benigno
Aquino lll, who has manifested his desire to rise on a question of personal
and
collective privilege.
THE OFFTCER (Rep. cayetano). May the Gentteman frorr

'RESTDING
o lhe second District of rarrac, the Honorabre Benigno
Aquino il1, state ore nature of
his rising on a question of personal privilege.
REP. AOUINO (8.). yes, Mr. Speaker.
Last June 3rd, while I was accompanying

the president as poft of the
congressionar deregation, I uns made to
undershnd that a privirege speech was
a
L
closing. So, as much as possible, the policy is to keep or to retain or to

maintain or for the banking institution not to fold up.
REP. APOSTOL. Mr. Speaker, may I request for a twenty-minute
recess, my throat is already drf

THE DEPUW SPEAKER (Rep. Gullas). The session is suspended for
nineteen and a half minutes.
ttwass:05p.m.
P
a
. CABANOS-2 .luly 13,1999
71
a
CABANOS.2 T,] July 13, 1999 5:00 p.m.
I think there is some kind of a policy, not immediately after resignation from
the central Bank, they cannot be employed in a banking institution. But we
should really review this and make it stricter.
REP. APOSTOL. But it should be placed here, ,,not on lhe Bangko
sentral". Because the one invohred will be the banking institution, not the Bangko
senkal. $ince they have separated already from the Bangko sentrat, Bangko
sentral has no more control over them. so, banks should not be allowed to
employ them because . . .
REP. LAUREL. Mr. speaker, I uncrerstancr that under'the Gode of Ethics,
there is a one-year prohihition hofore anyone who rp-tires from central Bank can
be employed in a banking instirrrtion. However. I thirrk if the Genfleman from
o Leyte is willing to submit the amendment that he has in mind on this bill, we
wilt
seriously consider this '
REP. APOSTOL. Yes, I remember . . . lwill do that, your Honor.
I remember last time, when I was the Chairman of the Committee on
Justice, when we investigated the Monte de piedad, the investigators coming
from the cenkal Bank of the Monte de piedad suddenly developed amnesia
because the officers of the Monte de piedacr come from the Bangko
o this developing of amnesia from the examiners of the Bangko senhal
senkar. so
should be
stopped. I am sure, that agalryuin thie Orient Bank investigation _
because the top
. ofiicers of orient Bank corneafniiltfihe"Bangko sentrar, the investigators from the

Bangko Senhal must have developed again
amnesia.
f: '. \
CABANOS - 2 July 13,1999
p (PO - Deputy Speaker Gullas)
REP. LAURF-L . there were "ghost clients", ancl it is not very easy fOr
the Cenlral Bank to determine this p1 co(rrse, we know, in principle, it is

Only a
matter 0f time when any kind of fraud in any banking institution will be discovered.
The only question is: "When will it be discoverecl?", "How much would have been
stolen?" Because really, lthink there is no banking instiiution where there is fraud
I
and it has never been discovered. Sooner or later, Mr. Speaker, this will be
I discovered.
1
ia
REP. APOSTOL. I was informed that the top officers of Mqnte de piedad,
I
Orienl Bank, and even Prime Bank come from the Bangko Sentral, that's why the
supervision is lax on this. Am I correct there?
REP. LAUREL, l{amlsbtryfMr: Speaker, I am not in a position to:confirm
this. However, I may say-that.this,is the human factor. However, the rules -
'.;
normally; the rules are the correct ruies, from the Central Bank.
REP. APOSTOL. That there should be an arnendment introduced to this
bill that no officers of the central Bank who was separated himself from the
Bangko sentral or who has retired, may be employed by the banks for the next
o three years from their separation from the Bangko Sentrql.
REP. LAUREL. Mr. Speaker.
REP. APOSTOL. ls the Sponsor amenable with that proposal?
REP. LAUREL, I think, Mr. Speaker, that's a very good proposal. WE
shoufd be abfe to take this up when we review the charter of the central
Bank.
a
. ]'\
..:
I]RACIA-{ hrkr | ? 10QO
4:55 p.rn.
;.,!
':1
the blame the
:.j
..?
tl ,
::l
.l
J odtt e4
a
nRaciairl '
July 13. 1999 4:55 p.m.
REP. APOSTOL. Like whar section, your Honor?
REP. LAIIREL. At presurt under Republic Act337,Mr. Speaker, the
directors of the bank are prohibited as well as the officers

from bonowing,
guaranteeing, endorsing or securrng surety for loans for
themselves or for
ofters, directly or urdirectry from the bank without any written

approval of
the majority of the directors excluding the btuowing director.
REP APOSTOL. But is it nor thar usually the majonty of the
directors belong to the sarne farnily?
REP. LAIJREI- Mr Speaker. nor necessarily.
REP. APOS'fOI_ Ilut most banks have that character.
REP. t.AtIREl.. I w-o.ld say, I\&. Speaker, rhat some of the rural
banks and some of the smaller thrift banks maybe family-owned
but because
of the requirement of the central Bank to increase the capital of each
banking institution the family-owned banks are slowly disappearing.
REP. APosroL. Even as of today? I rurderstand that stin many of

the banks, the members of the board of directors
are mernbers of the same
family.
REP. LAURELi'ri{I.,do not have, Mr. Speaker,

the exact report but my
gut feel is that it is no longer possible

for the big commerciar banks to have
family owning majority of the shares.
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Julv 13. 1r)s)l) 4:55 p.m.
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REP LALIREL. .. these kind of lrrinowings. So it is within the
admrnistrative frurction and the regularory function of the Central Bank.
REP. APOSI'OL. You know, much has been talked about about this
Doszu loans. Let us explai' again these DosRI loans and its implicatio's.
REP. LAUREL. Perhaps the Gentlernzur from Leyte, Mr. Speaker,
will appreciate better what is these l)osRl loans overexposure we are
talking about if we first define what is DosRI. It is loans to directors,

officers, stockfiolders,'rand related interests. In other words, lending to
themselves. This is the mea that is being controlled, Mr, Speaker,

o REP. APOSTOL. Do we have information as to how many of these
banks closed shop because of DOSRI transactions?
REP. LAUREL. I am sorry, Mr. Speaker, ar the moment we do not
have this information. However, we feel that when it is time to discuss the
cenrral Bank Act we should be able [o exrract from the central Bank thls
particular information.
REP. APOSTOL. kr othei words, rhere is no prov-ision under the
present bill to curb overexposure to this DOSRI practice?
REP. LAtrRtlr. 'rhere is, Mr Speaker, However, this revised
General Bankurg Act is flrrtlier sffengthening the contols

on DosRI roans.
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Bongulto -l Iuly 13,1999 4:50

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REP. APOSTOL. Over invested. Weil, I am tatking of

depreciation. lf there is depreciation, can we say that there will be an
Increase in man's performing loans vyhich threatens the profitability

picture of the bank?
REP. LAUREL. Well, this refers to the borrowing client, Mr.
speaker. lf the borrower borrows foreign currency and the value of the
peso depreciates when it is time to pay lhe loan, naturally, the cost to
the borrower becomes more. That is correct, Mr. $peaker.

o REP. AFOSTOL Ancl if this is so, how does the new measure
intend to address this particular problem?
REP. LAUREL Weil, Mr. Speaker, it is the Monetary Board that
oversees this krnd of transactions In fact, I have seen in the previous
months the Central Bank controlling this kind of borrowlngs... n
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market that they are servinq and to understand what risks are
involved
in their market.
REP. APosToL Nnw, one of the risks that immediatery come to
mv mind is the openness fo cross border capitar frows.

I am refeffing to
foreign exchange.risk when rocarbanks borrow from foreign

currency
and rend in dornestic currency) a sharp devaruation threatens
profitability. ls this observation correct?
REP. LAUREL I am sorry, Mr. Speaker, I did not hear the

o question.
REP: ApOSTOL. One of the risks that immediately come

to my
mind is the openness to cross border capitalflows. r am referring
to the
foreign exchange risk. when rocarbank borrows from foreign
cunency
and lend in domesric ,cuffency, a sharp devaruatron threatens bank
profitability. ts this observation correct?
REP. LAUREL. That is correct, Mr. Speaker
REP' Aposrol- can we associate ffris with the threat in terms

of depreeiation whieh ean threaten tfre viability
of the bank?
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REP. LAUREL. That is possibte, Mr. Speaker, if he I
bank I
concemed has over invested in foreign I
funds. A,/ I
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REP. LAUREL. ...and pubtication of financial statements. We
are also giving he Monetary Board authority to regulate compensatior.
of bank executives in exceptional cases and circumstances. Those are
the major areas in supervision.
REP. APOSTOL. So basically, the weaknesses of the bank is on
failure to provide sufficient penaltres in case of violation, the financial
statements not regularly given, and there should be proper regulation to.
be issued by the Monetary 8oard. ts this the so-called safety nets
intended by this bill and to improve the exisiing banking laws?
REP. LAUREL Well, Mr. Speaker, Genfleman from Leyte, it is
really to improve on the General Banking Act which covers all banking
institutions. This is really the intent of the bilt, Mr. Speaker.
REP APOSTOL. Now, is it possibte that with the enactment of
this measure, we would be exposing the banking sector to a new and
additional risk because of the provisions whicA would open the
floodgates to greater market risks?
REP. LAUREL On the matter of market risks, of course, the

cenkal Bank is reouiring the different banking instifutions to
oversee theu,
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penalties for unssfe and unsound banking practicas, as weil 0s r*quiring
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periodicsubmissio,n rndpublicetionof ,..lals
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REP. tAUREt wert. agrin, this wffi touchod upln in the sponsorship
speeeh but if the Gcntlernan from Leyte, rr{r. speaker, would likc me to go
ovar this again rnd our collengues will be patient enough to listen to this
I do
not nind.
REP. APOSTCIL Gb ahaad Flexsa.
REP- LAUREL 0ne are*, Mr. speaker, is the internationrl brnking
systen- All over the world thcre has been restructuring aud consolidation
through tha yeur dfecting competition among brnks. Therr rre m,oy ncw
opportunities for expansion. There is the globaiization of the capird markcts,
globrlizdion of the risk milsgsrocnt husiness, changer in ragulatory

ond
supervisory frnmework;.thc liberalization of domestrc and cross bordsr
activities, technologicolndevalopments puticularly information technology
ud dre fiaancial crisis, I &ink, is rnorc reccn[ Mr. Spcaker.
REP. AP0STOL. Now, your Honor, may I go to tha bnnking
supervisicn fuuction- prerse give us the functions which refcr

to banking
supervision under ftis bitt.
REP. LAUREL. I{ell, as mentioned eulier, Mr. $peakcr, Gentlcmnn

fron Leyte, to furthrr rtrcngthen the Burgko sentrer
ng pilipinas supcrvision
over banks we are granting the Monetiry Bosrd
authority to pcnorizc ening
hank executives. we are tso providing crearer guiderines aad sdditionol
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Ansuls- I July 13. 1999 4:45 p.n
{P0. DF}rrTY SPEAKER GUITAS)
RBp. LAUREL. ...we wdf,t to be abre t0 pr.tect thc bsnk st

th't
particuler nonant"sorothonoxis.6*powermcnt, s0 t0 speek, givcn fo the
Mouetary Board not,rtorroquirorpublicrtion of the fiuaficial condition of

the
bank concerued. Perhrps this is one way of protecting the braking systen.
However, it mry be truc thrr s.me pers'trs ernproyed with the ccfltrel
Bsnk
nry bu violaiing sofie of the rures by spreading rum'rs. But this hns to be
pr'v'n and the guilty parties shourd iherefore bc prosecutcir rccordingry,
Mr.
Spcuker.
Rtr. APOSTOL Thrnkyou
Now, is it not that we have enough banking laws as of tod*y which
would rddress dE poblms in drc burking indusfi.y?
REP. LAUREL_ yes, Mr. Spr*er, Gentlenrn fiom Leytc, wc do havc

banking laws specificaily tha Revised Generar Banking
Act. However, this ie
ur old lrw which is aimostJr ye*s orrr and through thc yeus,
I think thc
Gentlenan from Loyt*. Mr. Speaker. is swwe thnt bankrng
is very dynrnia
and it kerps on chaaging. Thrrl is why perhaps

it is ree'y timc thsr wc ancnd
fte old Gencral Burking Act.
REP ApOSTOL. Now, spccifically, what are

the specific problcnr
which we intcnd to sd&ess by &is bill?
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LEDESMA.l July 13, 1999 4:40 p,tn,
REP. APosroL- weil, I am very grad that this matter has been addressed by
the committee. Now, another issue which should be addressed

in tris bilt is the
propensity of the Bangko sentrar to be abusive. ft
has been observed that banks
experienced problems of fluidity if the Bangko sentral starts to
spread rumors that the
floundering bank is about to be destroyed. Banks which crosed

shop owe their demise
to rumors which emanate usuaily from the Bangko sentrar.
Exampre is the Monte de
Pieded, the rumors shrted from the Bangko sentral which

finally put finish to the oldest
bank in the country as if the Monte de piedad was sorery to be bramed.

And yet, a
closer look to Bangko sentral was equally liable and answerable. May I know
if there
is any comment on this by the sponsor of this bill?
REP. LAUREL.
.Mr. Speaker, Gen'eman from Leyte, I do not reaily want to say
that perhaps this is one of the subject matters that the committee should
be interested
in when we call the Central Bank during the consideration of the
Charter of the Central
Bank. However, for the information of the Genfleman from Leyte, Mr. speaker,
in one
of the provisions in the Revised General Banking Act under consideration.
it shtes that
the Monehry Board shourd be given the power to exempt

a bank from being required to
submit their financial slatdment or to pubrish their statement

if they are considering
mergers with other banking institutions or if this particular
bank is in troublo prectsGly
because we vyant to b
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LEDESMA. 1 July 13,19$9 4:40 p.m.
REP LAUREL." ...on' Banks and Financiar Intermediaries is aware

of this
particular problem. There is request not onry from
the Emproyees Association of the
central Bank but arso from the Monetary Board of the central Bank,
:;l
that job level 19
and below be exempted from the government standardization

of salaries because job
level 19 and above is already exempted. For the information
of the Genfleman from
Leyte, Mr. speaker, this humbre Representation sponsored
the bifl with the ways and
Means committee, asking for the exemption from the Government
standardization. of
salaries those from job revel 19 and berow and our commitee
on ways and Means
approved - I'm sorry,u,eommlttee.,on Appropriations approved this request. So,
hopefully, this would be{altelrruptyrthe Appropriations Committee.
REP. APOSTOL. yes, your Honor, but the complaint here is that
frere are
employees who have the same salary grade and yet, they do
not have the same sarary
scale. ls it not that this basic issue should be addressed by the central
Bank
management since this concerns something which either
motivates or demoralizes the
employees?
REP. LAUREL. Well, Mr. Speaker, Gentleman from

Leyte, those are probably
the details of the more important request of exemption
from the sarary standardization.
This Representation does not have a copy of
that but it may interest the Genfleman
from Leyte to know, Mr. speaker, that the
whore board and ofiicers of the centrat
Bank
Association went to me in Batangas to
robby for this particurar request which
as I said,
this Represenhtion was onry too happy
to tet them that it hgs been approved
in the
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Mlluna - July 13, 1999 4:35 p.m.
In our labbr laws, the principle has been reiterated time and again that
there should be equal pay for equal work. ls this policy being follorred by the
REP. LAUREL. Mr. Speaker - Gentleman lrom Leyte, your Committee on
Banks and Financial. .. ./mll

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Mlluna -
RE$UI,IIFTION AF $E$$ION
At 4:37 p.m., fhe session was resumd.
THE DEPUTY SPEAKER (Rep. Gullas). Session is resumed'
REP. LAUREL. Mr. Speaker - GentlEman from Leyte' these are he
Members of the commission on Banking Reforms. The chairman was the late
Manuel Morales, Member of the Monebry Board at that time; the Vice chairman,
Atty. lfiigo Regatado, Monetary Board Member - he is also no longer with us -

Members: Deputy Governor Ed Zialcita of the Bangko $entral of the Philippines;
Atty. Cesar Querubin, consultant of the Bangko sentral ng Pilipinas who was
President of a commercialtbdHltfbfore; Dr. Mario Lamberle of the Philippine
lnstitute of Developmenttsfrdis${S$rrLEonilo Coronel, Executive Secretary or
Executive Director of the"Bankers Association of the Philippines; Aurelio R.
Montinola lll, representing the thrn banks; sqsan Felix, also from ihe Thrifi
Bankers Association; Rahel Amoranlo, former President of the Rural Banlten
Association; Aty. Josefa Cauton, Atty. Fernandez and Atty. Reyes, representing
the Association of Bank Lawyers.
REP. APOSTOL. Thank you.
I have here the position paper of the Employees' Association of Bangko
Sentral employees wherein the employees of the bank decry the seeming
unconcern of management of the bank over the basic plight of employees on the
salary struc{ure being implemented by the bank.
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Mlluna - July 13, 1999 4:35 p.m.
(P,0. - Deputy Speaker Gullas)
REP. LAUREL. ,,;Esdq3lpordlnary commercial banks in atlied and non-
allied erilerprises and b'furthsrtffengthen the Bangko Sentral ng Pilipinas'
supervision over banks. More or less, those are the maior classificalions, Mr.
Speaker.
. REP. APOSTOL. l'll go to the last portion - to fuilher sFenghen the

powers of the Bangko Sentral on the regulation and supervision of banks. Your
Honor, is it not a tact that this bitt was drafted by the Central Bank or Bangko
Sentral?
REP. LAUREL. Not exactly, Mr. Speaker. As mentionEd again during the
sponsorship of this measure, there was in 1995 a commission crated whr the
Central Bank was represented but many of the members of the commission came
from the banking system. They also had some members from th academe.
They had lawyers. ltwas a big group.
REP. APOSTOL. Now, at least may I know who are these big groups?
SIJSPENSION OF SESSION
REP. LAUREL. Yes, Mr. Speaker, I shall read them again. I have the list,
Mr. Speaker, with me.'
May laskfor one-minute suspension, Mr. Speaker.
THE DEPUry SPEAKER (Rep. Gullas). Session is suspended for one
minute.
ftwas4:37 p.m.
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DOMINGO'I July 13, 1999 4:30P.M.
.
REP.APOSTOL.lnthatcase,YoutHonor,mayweknownowwhatarethe
challenges, the problems or what are to be attained by amending the old lau/?
REP. LAUREL. Well, Mr. Speaker, the Gentleman from Leyte' the
highlights of this revised General Banking Act has been mentioned by this
Representation during the sponsorship speech. I do not knory if the Gentleman
from Le$e would like me to again enumerate the highlights that was taken
up
during the sponsorship speech in answer to his question as tO what ate the
purposes of this revision of the General Banking Act'
to
REP. APOSTOL..Th|s Representation will be satisfied if the problems
be solved or to be made will be mentioned.
REP.LAUREL.A||right'Mr.Speaker,Isha||attempttoenumeratethern
this afternoon. one of the areas, Mr. speaker, that this revised tsanking Act is
amending or the provisions being amended is to further enhance the
competitiveness of the banking sector, that is one maior classification, Mr.
Speaker.
The other one is to improve prudenflal standards and, of courge, in the
lmprovement ot prudenthhctandords;,there ls an adoptlon of stlffer rules on slngle
borrowers llmlt, clarlfylng+rub$rtf,trlnvestments that the expanded commorclal
banks and the ordinary commercial banks"'/mvd
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DOMINGO - 1 JulY 13, 1999 4:30P'M'
At 4:30 p.m., the session was resumed.
THE DEPUW SPEAKER (Rep' Gullas). The session is resumed'
REP. GONZALES (N.). Mr. SPeaker.
THE DEPUTY SPEAKER (Rep. Gullas)' Distinguished Deputy Maiority

'r i1)
July 13, 1999 4:25 p.m.
SUSPENSION OFSESSION
THE DEPUTY SPEAKER (Rep. Gullas)' Session is suspended for one
minute.
Itwas 4:26 P'm.
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VIVERO - 1 July 13,1999
(PO - DEPUTY SPEAKER GULLAS)
REP.GoNZALES(N.).'.submittedbytheCommitteeonBanksand
Financial Intermediaries and for which purpose I ask that the secrebry
General
be directed to read only the title of the bill
THE DEPUTY SPEAKER (Rep. Gullas)' ls there any objeciion to the

The Secretary
motion? (Si/enceJ The Chair hears none;the motion is approved'
General is directed to read Gommittee F.eport 206 of House Bill 6814 - - the title
only of said measure.
THESECRETARYGENERAL'HouseBillNo'6814'entitled:'ANACT
PRoV|DINGFoRTHEREGULAT|ONoFTHEoRGANIZAT|oNAND
OPERATIONS OFANKS, QUASI-BANKS ANDTRUST ENTITIES. :
REP. GONZALES (N.). Mr. Speaker, to continue sponsoring th mas0re'
committe,
I ask for the recognition of the l.lonorable chairman of the sponsoring
the Honorable Macario l-aurel lV.
THEoEPUwSPEAKER(Rep.Gul|as).Thankyou,distinguishedDeputy
Majority Floor Leader, the Honorable Gonzales. The chair now recognizes our
colleague, the hardworking Chairperson of the Committee on Banks and Financial
Intermediaries, the Honorable Macario Laurel lV, to continue answering the

interpeltation of our distinguished colleague' Z'
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REGODON - 1
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At 4:24 p.m.,lfie sesslbn was resumd'
THE DEPUTY SPEAKER (ReP. Gullas). Session is resumed,
REP. GONZALES (N.). Mr. SPeaker.
THE DEPUTY SPEAKER (ReP. Gullas). Distingulshod Deputy MaJoiltY
Leader.
CONSIDERATION OF H.B. NO.6814
(contlnuatlon)
REP. GONZALES (N.). May we now continue consideratlon of Committee
Report No. 206 on House Bill No. 6E14, submitted by the Committee . . . ledl
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a fuFula - 2 July 12; 1999 5:50 p.m.
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THE DEPUTY $PEAKER (Rop, Abutg), Any objcttion? ($ileilce)
Thc Chair hcars nonc; hc motion is approved
Rm. R0XAS. Thmkyoq Mr. Spcaker.
'Tlm DEPUTY SPEAKER (Rep. Abueg). Distinguishcd M*jority
Floor leader.
REP. ROXAS. Mr Speaker, earlier this rfternoon, we nominated and
elected several members to form the House contingent to the bicameral
confarence committee to discuss the contradictory provisions of the House
urd Senate versions offlre Anfi-Durping bilk.

o
lv{r. Spe*ker, upan receipt af commttnication fron the distinguieherl
Mrnorrty Lesder, may I call for the withtlrnwal of the Honorable Felicirna
Belnonte in the said bicameral conference committee delegation I so move,
Mr. Speakcr.
TI{E DEPUTY SPEAKER {Rep. Abueg). Any objectiou to the motion
tn withdru,rr ? \ Siterce ) The Chair hears nonelthe motion is grdcd

o REP. R0XAS. Mr. Speaker, consequently may I hercby nominatc and
csll for the election cf the following to form the minority contingcnt to the
said bicamerd conference comnittee delegation: tha Honorabla Micha$l
Deferuor, fire Honorablcfumudo Moficnryor. I so nove, Mr. Spcakcr.
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Ansula- 2 Juty 12, 1999 5:50 p,m,

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one, the tirning brtween thr amendnent of the (-ieneral Brnkitrg Act vis-s-vis
thc amendment to the Central Bnnk Act: two. the senso t0 gct morc involvc
with rcspeot to foreign horrowings, and, three, Mr. Sperkcr, thc nced to
address some serious commentariss with resprct to thc cxcrcisc by the
Bugko Ssntral of the lender of last resort function under the Bangko Sentrsl
Actand rlso with respsct to its regulatory and supen'isory pcwers pertdning
to banks with particnlar regard, Mr Sperker. ta DOSRIs, SBLs, iuvestneat
linits and other transa.ctions that have proven to bs the msin causes, Mr.
Speaker, of brnk frilures. And lastly, the policy making- functioa or

o prrrogative or rr&ority oflhe Monetry Bord-
Thrnk you*vcryrrmuch for your patience, hlr. Speaker. Thmk you
very ruch"
REP. LAIJREL Thmkyoa Mr. Speoker.
THE DEPUTY SPEAKER {Rep. Abueg). Distinguished Majority
Floor lnader.
SUSPB.ISION OF CONSIDERATION OFIIB. NO. 6814
Rlp. R0XIS. thmkyoql$lr. Speaker.
Mr. Spcaker, at this juncturc, may I movs that we sow suspc[o
consideration of Conmiftee RepcrtNo. 206. I so move, Mr. Speaker.
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Ansula - 2 July 12, 1999 5:50 p.m.
p0 - DuruTv SPEAKER AIUEG)
RE, LAIREL ...wi$dru provisions oflaw.
REP. M0REN0. At lcast, Mr. Speaker, to my mind, thrt does not
inpair or affectr'thcmhdgpondeucu of the central monetery authority as
mandrted in the Constitution. In the same maflner, Mr. Speakcr, thot certsin
Bgencies lry down their objcctivas, their mission strtement as wcll rs thoir
philosophirs and policics. I see nothing wrong with asking the Monctary
Board to put into writing the buic trnets and principles that they will edhcre
to with respect to their policy rualing function. Because, Mr. Spcuker, how
co we grunt thc Monctary Boud r policy makfug function or prerogalivc
without any chu indication d thc very least, Mr. Spcakrr, or comfort thst
thal urthority will be sxercised with continuity, prcdictability urd
co'nsishnry.
Now, having srid that, Mr. Speaker. there arc still itr fsct othcr itcns
thrt this Represeniation would like ro ask our distinguished cottcql0
regarding the proposed me&sure but for the tinr being, Mr, $pcrkcr, lut ne
yield to sorne ofor coilaugues who mey still have questions.
But rt least, Mr. Speaker, let fte thark our distinguished collcag'c
becsusc w$ w6r6 abre to estalrish somc philosophical
foundationr rs fol rs
the proposed aruendment to thc Gener*l Banking
Act is conccmcd. Nunbcr
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July 12, 1999 5:45 p,m.
pressures coming in as time passes by, where the Monehry Board could be subjected
to kemendous Pressures from certain quarters, Mr. Speaker. And in the absence of
that policy shtement, then there could be no consistency, Mr. Speaker' At least, what it
seeks to do is establish consistency, predictability as well as continuity, Mr. Speaker,
certain norms that are conditions or requirements sine qua non as far as investors,
more particularly ttre foreign investors are concerned. So, Mr. Speaker, Gan we expecl
that policy statement from the Moneiary Board to be forthboming once we resume our
session, Mr. Speaker.
REP. LAUREL. Yes, Mr Speaker, we will require this of the Monehry Board or
rather we should request. I think the Monetary Board, Mr. Speaker, is independent.
But I think there is'ncthing wrong requiring them to give a policy statement, although I
agree that there is a possibility as far as discretion of the Monetary Board is concerned
that they would be lax at times and they could be strict at times but alt their regulations
must conform with the provisions of . ..teffi
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LEDESMA.2 July 12, 1999 5:46 p.m.
(P0 - Deputy Speaker Abueq)
REP. MORENO. ...in two weeks time, Mr. Speaker, and when the bill seeking
to amend the General Banking Act is again taken up, Mr. Speaker, we should be able
to get some sense from the new Monetary Board, Mr. Speaker, wih he new members,
as to what their general sentiment is, their policy-making regulation or philosophy
would be. Because, I think, Mr. Speaker, we cannot cover many other issues
particularly the rule-making power of the Monetary Board. ThEre is a very huge room
for discretion on the part of the Monetary Board. This is just by way of suggesiion, Mr.
Speaker, that the distinguished Chairman get a definitive statement or policy, Mr.
Speaker, from theaMoneftarytBoard as to how it would exercise its policy-making

.
function and duty, Mrrtspeaker.
REP. LAUREL. Mr. Speaker, I agree with the suggestion of the Gentleman from
Misamis Orienbl, we will require some policy statement from the Monehry Board.
However, for the information of the Members of the bigger House, going over the.list of
\, incoming members of the Monehry Board, Mr. Alindogan, who was a former colleague
of the Gentleman from Misamis Oriental, is a banker, just like lhe Gentleman from
Misamis Orienhl. And I am sure his orientation will not be too hr from he Gentleman
from Misamis Orienhl's. So, I do join the Gentleman in his proposal and we should sE
to it in the Committee on Banks, that the law is followed strictly.
REP. MORENO. lthink, Mr, Speaker, there is also, to my mind, some reason for
that. Because it also sorts of puts down in black and white in very
- at least therE is an
attempt to lay down the policy-making philosophy of the Monebry Board. And I thlnk
at
this point in time, it is important, given, Mr. Speaker, that there could be possibilities
of
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Mlluna - iune 17,1997
5:40 p m
Bangko Sentral could very well exceed the limiting conditions in hE law wherE fte
Bangko Sentml becomes more, let's say in one inshnce, the Bangko Senhal
becomes stricter than the law. ln some instances, the Bangko Sentral would
simply restate the law and in some inshnces, Mr. Speaker, tre Bangko Senfial
would somehow relax the law. And certainly, Mr. Speaker, this issue is related to
the rule-making power of the Monetary Board. And that is precisely why this
Represenbtion had asked as io who the new Monehry Board Members are, Mr.
Speaker.
Probably, Mr. Speaker, when Gongres. ,*.u*", session in tryo weeks
time..../mll |' n
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DOMINGO .2 July {2,1999 5:35P.M.
THE DEPUTY SPEAKER (Rep. Abueg). The session is suspended.
It v'ss 5:37 p,m
At 5:38 p.m, the sessinn was resamed,
THE DEPUW SPEAKER (Rep. Abueg). The session is resumed.
REP. LAUREL. Mr. Speaker, in answer to the question of the Gentleman
from Misamis Oriental, the present Governor, Mr. Rafael Buenaventura has been
appointed as Member of the Monetary Board, Mr. Juan Quintos, Jr. has been
appointed, Melito Salazar has been appointed and Antonino Alindogan will be
appointed soonl buftthemarnehas,already been announced, Mr. Speaker.
REP. MORENOffihfitryou very much, Mr. Speaker.
Now, focusing norr, Mr. Speaker, on House Bill No. 6814, I gather that in
the earlier interpellations of some of our colleagues, the distinguished sponsor
had summarized the basic and more salient changes that arE sought h be made,
Mr. Speaker. Now, Mr. Speaker, focusing. ,./mvd
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REP. MoREN0iil$some.commenhries, Mr. Speaker, that to tre efect
that the Central Bank is very strict with respect to the complying banks arc
concerned. lf these banks are complying and are observing the rules and
regulations of the Central Bank, then invariably, these banks feel the pressure
from all over from the Bangko Sentral. But, on the other hand, Mr. Speaker, banks
which do not comply with these regulations are being treated by the Bangko
Sentral with soft heart, Mr. Speaker. May I please get the reac'tion of our
distinguished oolleague or for that matter, Mr. Speaker, from the representatives of
the Bangko Sentral with respect to that observation, Mr. Speaker.
REP. LAUREL. Mr. Speaker, I think this question should really be properly
addressed to the Central Bank when we start deliberations in the commlttee bn
the revierrv of the Central Bank Act. I will join the Genfleman from Misamis
Oriental in pursuing this matier at the proper time, Mr. Speaker.
REP. MORENO. Now, Mr. Speaker, let me go to the heart and soul of fte
Bangko Sentral ng Pilipinas which is ihe Monetary Board. May this
Representatlon be Informed, Mr. Speaker, as to who have been rqcnfly
appointed as Members of the Monetary Board over the last tlyo months. Mr.
Speaker?
REP. LAUREL. Mr. Speaker, may ljust ask for a one-mlnuts break so I
can get the list of the newly appointed members of the Monetary Board.
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Mlluna - June 17.1997 5:40 p.m.
(P.O. - Deputy Speaker Abueg)
REP, MORENO. ...Now, Mr. Speaker, focusing on the DO$RI, at least for
the moment, the DOSRI rules, loans by banks to directors, ofiicers, slockholders
and related interests - what, Mr. Speaker, is the position of our distinguished
colleague with respect to DOSRI loans? Will this be totally, absolutely prohibilcd
or will the present practice be retained or the practice currently applied will be
modified, Mr. Speaker?
REP. LAUREL. Mr. Speaker, there is a modification in the present bill or
the General Banking Act that is being considered. The DOSRI limitation, Mr.
Speaker, was expanded to cover bank exposure in general. The loans, credit
accommodations and guarantees which a bank can extend to DOSRI shall

o limited to an amount equivalent to their respective unencumbered deposits and
be
book value of their paid-in capital contribution to the bank.
There is a paragruph that was added, Mr. Speaker, to ctartff exemption of
cooperaiives, stockholden of cooperative banks from the DOSRI limihtion. This,
as mentioned earlier*Mra$peaker by ttre Genileman from Negros Orienbl, is one
of the culprib for fallBhltbftBittnerbanking inslitutions.
REP. MORENO. Yes, Mr. Speaker. I have noticed that same approach ie
being done with respect to the other hansactions or certain activilis like
bonowing limib, investment timits, etcetera, etcetera. But there is one thing, Mr.
speaker, that I would like this chamber to note and which is

- at the end of the
day, we passed a law but then the imprementing regurations are issued
by the
VIVERO.l July 12,1999 5:30 p.m.
a
in an attempt, Mr. Speaker, to deliver home the point because the General
Banking Act contains a penal provision. For violation of the law, the violator is
subject to certain penalties, fines and/or imprisonment, Mr' Speaker. ln the
circular$ and regulations issued by the Central Bank, there are also penal
provisions with respect to these regulations and circulars prohibiting certain acts
or tfansactions, Mr. speqker. And', Mr,. Speaker, as fiar as th6 historical records of
the Bangko sentral*nglPiliFitlas^can support, are you telling us, Mr. Speaker, that
there has been one''criminaFprosecution and that involves Orient Bank and if sO,
Mr. Speaker, can you be more specific on the nature of the offense for which the
I prosecution was done, Mr. SPeaker?
REP. LAUREL. Perhaps, if the Gentleman from Misamis Orienbl' Mr'
speaker, will agree, we shoutd require the central Bank to submit a report on all
the cases that they have discovered and what actions they have taken whigh may
be useful when we start discussing the Charter of the Central Bank.
REP. MORENO. I would wholeheartedly second the suggestion, Mr'
speaker, of the distinguished chairman of the committee on Banks and Flnancial
o lntermediaries and related to that, Mr, Speaker, there
commentaries... /acv 7,",-r

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July 12, 1999 5:30 p.m.
REGODON - 2 Juty 12; 1999 : 5:25 P.m.
that the Bangko Senhal ng Pilipinas has not really performed ib functions, its
mandateas itshould have been... /edl q3*-
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Now, over the last ten or so years, Mr. Speaker, there had been many
suggestlons, reseryations, commentaries that the Bangko Sentral has not really
exefcised that funcflon or that particular mandate - - the lender of last resort - -
with ihe prudence ilrat'ig:called for in the circumshnces, Mr. Speaker.
No less lhs6 1r s r,'rf6rm6r Bangko Sentral ng Pilipinas Governor had
questioned the sltting.entraltBank Governor of some - - let me use a kinder word,
Mr. Speaker - - som6 lapses with respect to the exercise by the Bangko Sehtral ng
Pilipinas of that function as a lender of last resort. That is not a simPle mater, Mr.
speaker, that can simply be glossed over by this chamber. Like I said, no less
than a former Central Bank Governor had questloned the pollcles and pfaCtlces Of
the same institution as a lender of last resort.
May I please get the comment of our distinguished colleague, Mr. Speaker'
REP. LAUREL. Well, Mr. Speaker, Genileman from Misamis Odental,
perhaps this matter of questioning whether the central Bank really exercised lts
prerogatives or performed its duties may be addressed to them when we slart
discussing the Charter of the Cenkal Bank,
REP. MORENo. Yes, Mr. Speaker. Because that ls a polnt that preclsely
demonstrates the need for addressing the Central Bank Charter belore the
But anyway, Mr. Speaker, let me go to a related point. For lnstanco, ln fte
case of regulatiqns of banks and certain other financial institutions under the
General Banking Act, there had also been numerous commentaries, Mr. Speaker
,
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PdGODON.2 July 14 leee 5;25 p,m,
REP, MORENO. . : . ?s far as the Central Bank is concerned. The power
of the Central Bank under the General Banking Act is merely a subset of the much
huge and much bigger powers and functions of the Central Elank under the
Bangko Sentral ng Pillplnas Charter, Mr. Speaker.
REP. LAUREL. Yes, Mr. Speaker. The Central Bank Act of 1993 rrrns
approved and the General Banking Act was also supposed to have been
approved immediately after. So, it was really the Central Bank Act that was
studied and approved, and then the General Banking Act followed. Unfortunately,
there is a long-term period that had passed because for some reasons, the studies
made in 1995 are only now being presented to Congress for final approval,
although during the last Congress, this General Banking Act reMsion was already
submitted, disculsed but somehow it dicl not pass the last Congress.
REP. MORENO. Mr. Speaker, let me go shaight. Lel me be more
speciflc. Because the General Banldng Act talks about the regulatory, the
supervisory powers of the Bangko Sentral ng Pilipinas over banks and certain
t other financial institutions. And that set of supervisory or regulatory powers ls
merely one of a much larger set - - major set - - of powers and functions of the
Bangko Sental ng Pilipinas.
For inslance;,in*the.Bangko Sentral ng pilipinas Ghartpr, the Central Bank
also has the po,rner to lEnd as a lender of last resort, Mr. speaker, wifr respec-t
io
banks operailng and authorized by the Bangko Sentral.
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Cejes-2 July 12, 1999 5:20 p.m.
pursued with vigor once the Congress resumes its session come July, Mr.
Speaker.
So, the question really is, why are we addressing the General Banking Ac't
first before compliting the proposed amendment to the, why arq we addressing
the General Banking Act first and thn look at the Bangko Sentral ng Pilipinas
charter later and only to find out, Mr. Speaker, that we may be jurnping tho gun,
so that whabver changes there may be as far as the Constitution of the Bangko
Sentral ng Pilipinas will have been rendered academic with the approval of lhe
General Banking Ac't, Mr. Speaker?
REP. LAUREL. Mr. Speaker, as w mentioned eadier, bo6t the Cenkal
Bank Act and the,,,C'Enrah,Banking Ac{ were studled and lhere is no confllct
betvveen the two.'nWallffsrtooked at the proposed amendmerlts b ho nerrl
Cgntral n Act and*therib*nothlng which wlll be inconslstent wltr the norr
undEr discussion General Banklng Act.
REP. lvlORENO. Yes, Mr. Spgaker, but that does not preclude the
Members of ftris Chamber fiom refining or ffne tuning Srat constitufron of the
Bangko Seniral ng Pilipinas.

o
REP. LAUREL. Well, Mr. Speaker, the Chamber wlll harn all the
opportrnlty to look over lhe Central Elank Act when it is up for dbouselon.
REP, MORENO. Yes, Mr. Speaker, but it would have beon sequenUally
conect or better at the very least, if his chamber would take up tre certral Bank
ij
Act first before the amendmenr b the General Banking Act, bocause the
$
amendment to the General Banking Act is merely a subsetto, as hr es he ,..
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CeJes-2 July 12, 1999 5:20 p.m.
(PSDeputy Speaker Abueg)
REP. LAUREL:''i',";,*Mr; Speaker, the charter of the Csntral Bank wus
amended by whatnis'norar*lfiorvn as Republic Act No. 7653 last 1993. The
General Banking Ac't should have also besn amended by ffrat time; hoiyever, it
was not. The proposed amendments now to the General Banking Ac,t are all
consistent with the provisions of the new Central Bank Ac't.
REP. MORENO. That assumes, Mr. Speaker, that we are not or that Srere
is no move now to amend the charter of the Bangko Sentrat ng Pillplnas. But as
alrady established in the first questions that I have ralsed, there ls lndeed a bill
pending in the CommittEe on Banks and Financial Intermediaries that seeks to
amend the charter of the Bangko Sentral ng Pilipinas. So, the quesiion really,
Mr. $peaker is, because the Bangko Sentral ng Pilipinas charter is the, actually
the Constitution of the Bangko Sentral ng Pilipinas. lt grants the porers, tre
prerogatives, the limitations of these powers and prerogativee, as well as ihe
dutiEs and the obligations of the Bangko Sentral ng Pilipinas. And he Gqneral
Banking Act as far as the Bangko Sentral ng Pilipinas is concemed, merely

covers the regulatory povver, as well as the supervisory porver of the Banglo
sentral ng Pilipinas. so that the main item that really concems he consfftuffon,
the basic powers and functions of the Bangko sentral ng pilipinas ls ths charter
of the BSP which is no,v being reviewed by the committEe on Banks and
Financlal lntermediaries, and as stated by our distinguished colleague, wlll be

MALIWAT - 2 July 12, 1999 5: 15p.m.
lientrai rrg Plllplrrae t-:herter. N.]w. f_.Lre r.eaEon for tfile --

let rne pref E.-:e this, Mr - Speaker. with this, because the
Genera] Bankirrg Ae;r. talhs of a Banplla Stntral ng Pilipinag
ae the t:e1ul-at"or:. a.nri if we wre to wr:r'k nn the amendment to
the Gerer al Bankirre Act aheacl oi- the pyrlato:led amendment to
the Charter rlf the Bangkr., Sen'l;ral ng Pilir,inag, woufd we be
juml,inq the gun, l'{r.'- ii';:sak.*r. ts.s f +r ae-; the regulatory

power.sj .;l- the Bangko l;ent.ral ne Filifiinas.: ar..e ronr-,erned?
REP. t-ALIfiEL. Mr' . iipeaker.. the (lh:rter. c,-'f the Central
0,jr : I
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}'IALIWAT . Z ,luly ll, 1lJ3't F,. 1 F'n rn
REP. MORENO . 6F,eaker, r-hat is in the Foreign

- Yeg , t'{r
Ilorrr,rwings Act . But sad to sav , lh,el, quarter ly report is

riot being dieeeminated ta the t4embers of this Charober - So
that pr'obably only a handt'ul of tire Members of thie
Chamber, Mr. Speaker, would Lre aware f the exact data eiverr e-r
bv the Ea,ngko i:,entr aL ng Pl li!'inas .

REP. LAIJREI. Mr. Speaker.. i am informed that the
Offlce of the Speaker. ls the one that receives this report.
We wtll aek that all the Membere be given copiee.
REP. MORENO- Mr. Speaker. perhal'e, I think it ie

lrnportant that each Member of the Chamber is also given 6.
copy of thle report, for ue t() rrave a better underatandin8
of the foreign debt situation, a.e weI-I as alI the other
relevant informati-on with respect to our fiscal po61tlon,
Mr. Speaher- Given the desire of the distinguiehed Chalrnan
of the Corunittee on Banks and Financial Internediaries and
of course his adherence Lr: demoeratic principlee, can I
pleaee get the aeeurarrcje of the clietineuiehed eolleague,
lhat lnrfeecl theee rep.Jrt wIlI yLe disseminated to the
Membere c,f thie Charnber as and when tlrey are received, Hr.
Sr,eaker.
FEF. LALiREL. Fir'. Sllealrer. may g1-Ye the aaEu!.ance

thal tlte t:opies will be {iiritr.lbuted all the Membere of
the House -
REI' . l{tlRENC} - }et ne eo to the polnt

Now. Mr_ liFealrer".
ri that has to do wj.th the pr.opo-seci amenclment to the GenereL
tr'
'Banking Act vis-a-vis the p,r,oposed
aurentlment to the Ban,gko
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MALIWAT - 2 Julv l-!, 1999 5:15p.m.
r PO - DEPUTY SPEAKER ABI.If,g i
REP. LAIJREL. when we reeune our regular

e es Ions .
FIEF, . Thank I'ori veral' nuL-:h , i{r. . l1p:sk.r.

i'JORENO
. I'low. can 1 ask the honorable {lhairman to get the

commitment from the representalives of the Eangho Sentral ng
Filiplnqs wiro ar.e at his back" fr:r us to have a write-up on
forein borrowings or foreign ]oans, say. tiy the time that
we realrne our' se-qraioDr:, Mr, ijpeaker. Balr.. even durLng the
t*1r'st, two r.reeks of Augueti-, Lri:l that lnf L-rrrtat i L-11-l t,hat neede to
be gh.en with resFect to the$F f ore igl) f,Ltl'rLlwlngs ia glven
at least to thi.q Chamber. Mr. Sueaker. glven the
signlf iLrance " the inir:o|tance arrtl lhe iielevance 6f theee
fcreign tror:r'owings tc, orrr. t-raf.iona.l er-:onnllli.f . situatlon. Mr.
Spea.l<er.
REP - " Mr, llr:ealrer, we ha..'p ille ar3durance frour

LAIIREL
the lepresentai.lve s trf t.he Monetary E,:ra:.cl that they will

sul,Dly tlre trecessat.',' Fpe.tif iLr |egulat.ionLl later on.
REI'. l"JrlFEllti.' A.j v/n11 .1e .i wl-it.i-ur, flr. $Feaker.; on
o the forelgn borr.owlt:gs. I altuat,l{,ner, fo:. i"nstance, wlth
peBpect to the foreign foane of tire Fhllipplne6, llr.
Speaher.
FEF. . Yez, , .t{r' . ir.eek::r' . At the lnoment there 1e
LAI-}REL
a quarter.Iy report belng 1rf,Buer.l by t,he Monet+ry Board

concernlng foreigtr loane cjata anci it its flvel1ab1e to the
pnbl ic .
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SANTOS.2 July 12,1999 5:10 p.m.
REP. MORENO, And does that or do these regulations apply to
foreign borrowings by lhe government, Mr. Speaker, including govemment_
owned and controlled corporations?
REP. LAUREL, That is correct.
REP. MORENO. May the Genfleman please cite the number or the
specifics of lhese regulations, Mr. Speaker. The reason for my asking, Mr.
Speaker, is, it would quite appear, Mr. Speaker, that the Bangko Senkal ng
Pilipinas has not really taken an active role with respect to regulations or
practices or norms pertaining to foreign borrowings, especially insofar as the
governnicn! is concerned, Mr. Speaker, or ifthe Bangko Sentral has been quite
active thcre has iict been appropriate transparency, Mr. Speaker, with respect
to thc dissenririaticii uf tii,,,sc regukltions to the public and for that mater, Mr.
speaitei, iet rriu cite the iiecond sentence of $ection 21, of Article Xll, which
says: "lrrformation,on,,forsign loans obtained or guaranteed by he Government
shall be madeavailablertorthe public.'
Now, I do not know, Mr. Speaker, if the Bangko Sentral has been
conscious of this mnstiMional mandate; Mr. Speaker.
REP. LAUREL. Mr, Speaker, this Representation has been

assured by
the representatives of the centrar Bank that they have been
attendrng to ffris.
Perhaps, the Genteman from Misamis orientar may
want to question the
central Bank when we start reviewing the charter of
tre centrar Bank Ac,t,
hopefully in two weeks time when we rssume

our. . . ..w=,
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SANTOS -2 July 12, 1999 5:10 p.m.
P0 - Dep. SpmkerAbueg
REP. MORENO. ". . . monetary authofity."
Now, with respect to Section 21 , and let me again read his for the
records, Mr. Spmker, it says: "Foreign loans may only be incurred in
accordance with law and the regulation of the monetary authority. Information
on foreign loans obtained or guaranteed by the Government shall be made
available to the public."
Now, Mr. Speaker, let me focus my guestions for the moment, Mr.
Speaker, on foreign loans. Because the Constitution requires tha! they may be
incurred only in accordance with law and the regulation of the monetary
authority.
Now, the question, Mr, Speaker, is, yrhat, if ary, are the regulations trat
have been issued by the Bangko Sentral ng Pilipinas witr respect to foreign
loans, Mr. Speaker?
REP. LAUREL. What is the question again, Mr. Speaker? lam sorry,
REP. MORENO. The question again, Mr. Speaker, ls, has the Bangko
sentral ng Pilipinas in the exercise of its constitutional mandate issued
regulations with respect to or covering foreign loans or the incunence of foreign
loans, Mr. Speaker?
REP. LAUREL. The Gentleman from Misamis Oriental is conect.
There is a covering regurarion from the monetary board requiring

bonowen to
submit their loan proposals for clearance of the terms
and conditions ,dA
Oilr,'1d
July 12,1999
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CABAI'JOS - 2 July 12,1999
Session is resumed.
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to the total debt position of the
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us It is the Department of
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Jdy 12" 1999 5:00 p.m.
Now, let me g0 t0 another preliminarv item, lvlr Speaker, and thishas
to do with the item on fcrrcign bonorvngs. Ilecauss under our Constitution
loreign borrowings are sr4rposed to be sub.jectcd to prior Monetary Board
recommendation. I)oes the distinguished (ientleman agree with me, Mr.
Speaker?
REP. LAURtd, [r4r, Speaker, I arn solry, I did not get the whole
question.
REP. MORENO. Let me repeat, Mr. Speaker. Under tlre Constitution
foreign borrowings are supposed to have a prior r.ecommendation on the parf
of the Monetary Board o1'ttre Bangko Sentral ng Pilipinas. Is that conect,
Mr. Speaker?
REP. LAUREL. The wordings, Mr. Speaku, is the need for pnor
concurrence by the Monetary Board.
REP. MORENO. I stand conected, Mr. Speaker ..,
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BRACiA.2 Iuly 12, 1999 5;00p,m,
j
I REP. MORENO. Now, on a related matter, Mr Speaker, now that we
have a new Govemor of the Ban$o $entral ng Pilipinas, can it be expected
or at least anticipated that the new Governor will have a position on the
proposed amendment to the General Banking Act that is not totally uhgned
or in consonauce with theposition of the Govemor that he had succeeded?
REP. LAUREL. N{r. Speaker, I have spoken with the new Central
Rank Govemor and he has not mentioned any position which is or maybe
contrary to the proposed General Banking Act ln fact, lvfr. Speaker, the
present Govemor was a member of the cornmission that was established
almost five years ago to precisely review the General Banking Act and he
participated actively and he was inskumeutal in the approval of the now
presented under consideration Revised General Banking Act.
REP. MORENO. So, Mr. Speaker, we can) therefore, assurre rhat for
the purpose of continuing the discussions on the proposed amendment to the
General Banking Act which is now the bill under consideration there will be
no changes as.far as the Banpiko Sentral ng piliprnas is concemed with
respect to the proposed aruendment to the General Banking Act.
RLP. t-AURt,L. Mr. Speaker. Ibelieve so
REP. MORENO. Okay, thank you very much, Mr. Speaker.
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BRACIA-2 Julv 12, 1999 'n', 5:00 p.m.
(P0-Deputy Speaker Abueg)
REP. LAT]REL So that it is still pendurg and hopefully during
the regular sessions, N,ft. Speaker, this bill will be discussed by the
Committee on tsanks.
REP. MORFNO. And now, lt4r. Speaker, that we now have a new
Govemor of the Bangko Sentral ng Pilipuras, so can it tfren be expected that
the bill that seeks to arnend the Bangko Sentral ng Pilipinas charter will be
taken up with vigor rn' the Committee on Banks and Financial
lntermediaries?
REP. LALIREL 'l'hat is correct. Mr. Sneaker
REP. MORENO. And, Mr. Speaker, can this Representation be
informed as to whether or uot the new BangJ<o Sentral ng Pilipinas Governor
has made any reaction or comment to the bill now pending in tie Committee
on Banks with respect to the amendment of the Bangko Sentral ng Pilipinas
charler.
REP. LAUREL. Mr. Speaker, the new Central Burk Governor, just
like the former central Bnnk Govemor, did not have the opportrmity to give
any comments preciselybecause we have not called them to comnent on the
bill while we were in the previous regular sessions
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Eongu[0.1 .luly 1?, 19$9 4:55 p.m.
that seeks to amend the charter of the Bangko Sentral ng pitipinas, is
that conect, Mr. Speaker?
REP. MORENO And may I please be informed, Mr. Speaker, as
to the status of that bittamending the charter of the Bangko $entral ng
Pilipinas.
REP. LAUREL. Yes, Mr. $peaker, Genfleman from Misamis
Oriental. The Committee on Banks wanted to schedule the discussion

o of this bill, Mr. Speaker. However, we were prevailed upon to postpone
the discussion because of the change in Governor of the Central Bank,

T
so that it is still... A/
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Esngufi6 =1 iuFJ ru. 19F! 4:66 p;m.
Mr. Speaker, may I please ask if our distinguished colleague from
Batangas, the honorable Chairman of the Committee on Banks ano

Financial Intermediaries, be willing to yield to some questions, Mr.
Speaker.
THE DEPUTY SPEAKER (Rep. Abueg). He may, if he so

desires.
REP. LAUREL. Mr. Speaker, this Representation is more than
willing to be interpellated by the Gentleman from Cagayan de Oro who
has been very consistently supportive of the work of the Committee on
Banks for this whole period of time
REP. MORENO. Mr. Speaker, I am from,Misamis Oriental. Mr.
Speaker, First Districi of Misamis Oriental.
REP. LAUREL I am sorry, Misamis Oriental. I stand conected,
Mr. Speaker.
THE DE'PUTY SPEATR (Rep. Abueg) The Genfleman may
proceed with his interpellation.
REP. MORENO. Thank you very much, Mr. Speaker.
Let me just preface my interpellation, Mr. Speaker, with some
preliminary questions because it is my understanding

ffrat frere is also
pending in flre committee on Banks and Financiar
rntermediariea a bifl |/
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Bongullo -1 July 12, lSSS 4:55 p-m.
At 4:57 p.m.. fhe sesslon was resurned
THE DEPUTY SPEAKER (Rep Abueg). The session is
resumed.
Distinguished Majority Floor Leader
REP ROXAS. Thankyou, Mr. Speaker
Mr. Speaker, our parliamentary status is, we are in the midst of
our consideration on Second Reading of Committee Report No. 206
regarding House Bill No. 6814 also known as the General Banking Act.
For trris purpose, Mr. Speaker, we have recognized the distinguished
Chairman of Sre Committee on Banks and Financial Intennediaries, he

Honorable Jose Macario L. Laurel. And at this juncfure, Mr. Speaker,
may I ask for the recognition of the Honorable Oca Moreno who will now
begin his interpellation of the Chairman.
I so moye, Mr. Speaker.
THE DEPUTY SPEAKER (Rep. Abueg). The Honorabte Oscar
Moreno is recognized to commence his interpellation.
REP. fulORENC. Thank you very much, Mr. Speaker. Thank you
very much, Mr. Majority Floor Leader.

oat,.{V
'1",
Mlluna - July 12,1999 4;40 p.m.
I
THE DEPUTY SPEAKER (Rep. Abueg). The Secretary General may
please comply.
THE SECRETARY GENERAL. Houee Bill No. 6814:
AN ACT PROVIDING FOR A REGULATION OF THE

ORGANIZATION AND OPERATIONS OF BANKS, qUASI.
BANKS, TRUST ENTITIES AND FOR OTHER PURPOSES.
THE DEPUW SPEAKER (Rep. Abueg). The distinguished Majority
Floor Leader.
REP. ROXAS. Mr. Speaker, may I ask for a few minutes suspension
while we gather the technical staff.
THE DEPUTY SPEAKER (Rep. Abueg). Session is suspended and the
technical staff of the Gommittee on Banks and Financial Intermediaries may
now take their place in the session hall.
Itwas 4:tl4 p.m- ...Jml\,,

(url
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1
Dacillo4 15 l.lovember i 999 Z:4S p.m_
(PO. Deputy Speaker cultas)
@ REP. MORENO, ... Would you care t0 commenton that?
REP. LAUREI. Yes, Mr. Speaker. This Representation really thinks
that very soon the Monetary Board will probably allow the sale of insurance
policies in the different branches in the country.
REP. MORENO. Mr. Speaker, that is only one example. But again
given the dearth, the fact that the General Banking Act would be very
superficial, leaving the wider dimension to the absoluie discretion of tfie
Monetary Board and given, Mr. Speaker, that the suasion al the very least, the
influence that tre Monetary Boaid has, the Bangko Sentral has over hese
banks: we are, in effect, allowing these banks to be at the mercy of the
Monetary Board. So that, Mr. Speaker, we are not actua y legislating or
coming up withrfEfutmlneasures but what we are actually doing is gMng the
process, coming up with a very
just like that in Malaysia, Mr.
Speaker. Instead'of.,coming up with an environment that will give the players
the opportunities to expand to be competitive as what precisely is mentioned in
the declaration of poricy, Mr. speaker, where we want the banks and
the non-
banks to be globally competitive. That's what we are saying.
And the others
are now doing that, and yet we cannot do that, simply becausE the
Monetary
Board does not want us to do. And with the very hint excuse, if they allow
these banks to do this, then what will prevent these

banks from selling .
pesticides, Mr. Speaker. I cannot really understand
the sifuation, Mi. Speaker. (
1
,4'
00090
,09726
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15 November 1 999 7:45 p.m.
REP. LAUREL. Mr. Speaker, I think we should not take the illushation
very seriously. But fte reason why the word ,,pesticides" rryas mentioned, as
well as the "fam'fsrtilizers" was also mentioned, is because the rural banks are
allonyed. Andcqgigffiallypossible. But I think the concern of the Gehfleman

l "is'1
from Misamir*ntrfiffitffibetaftended to in the very near flrture. we cannot
. .:,.i . '.1;
resist. As tho{6ghternififsaiO;,we are going to compete globally. lf we are
going to resffict o0rbonking system and not follow what is the practice
all over
the world, I think we cannot progress, Mr. Speaker.
REP. MORENO . Anyway, Mr. Speaker, I do have some reservdtions
and probably this can be taken up in the period of amendment.
'Thankyouverymuch,Mr.Speaker,foryourkindindu|gence
And I hope that this Representation would still be heard during the
period of amendment.
Thank you very much, Mr. Speaker.
REP. LAUREL. Mr. Speaker, I woutd like to say here that I enjoyed
answering the questions of the Gentleman from Misamis Orienhl. He cerhinly
gave quality questions and it is really my pleasure entertaining all the
questions.
Thank you, Mr. Speaker.
THE DEPUTY SPEAKER (Rep. Guilas). Thank you, distinguished
chairperson the Honorabre Macario Laurer lv. And thank you, distinguis}ed
colleague, the Honorable Oscar Moreno,
2 000el
0972 6r
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7:45 p.m.
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i! REP. BARBERS. Mr. Speaker.
I
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itl THE DEPUTY SPEAKER (Rep. Guflas). For what reason does
,{r the
H
distinguished Gentleman from Surigao, the Honorable Ace Barbers rise?
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REP. BARBERS. Thankyou, Mr. Speaker.
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I do not wish to interpellate the .. ./cpd (
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CABANOS - 4' November 16, 1999 7:40 p.m.
(PO - Deputy Speaker Grrlla;)
REP. LAUREL. . . what is allied financial and non-financial allied. And
when we confronted the Cr:ntral Bank, they admifted that it is vory difficuft to
define allied financial and non-financial allied, and therefore, they ended up by
illustration and enumeration. But through the years, because of eperience, the
Central Bank has been able to craft some kind of coverage of this allied financial
and non-financial allied.
Ho$/ever, I would also like to comment on the statement of the Gendeman
from Misamis Oriental, tre polen that we have granted the Monehry Board. Of
course, at flrst glance, we think that we have mpor/rd so much tre lrlonebry
Board. But what is'imporhrtlMr, Speaker, is that there is frexibitity. &irau:;e lhe
momet* ws-enurnenndhircsiblerissues.that we can think of and put it in the
law, then vye no'hng*lErfrgtibler"And you knorfl how dynamic banking is, Mr.
Speaker. And so, trisrReprdsenhtion is not really tyorried that ttre Monehry
Board would be abusive. Because by experience, I know this for firee years.and
a half, I was a member - no, rather fur three years, I was a member of lfte
Bankers Association of the Philippines. And whenever the BAp would find a
particular rule of central Bank that is not judicious, that is not fuir, that is defective,
it will imnredidrtely pounce on the central Bank. And this holds true, Mr. speakel
not only with the Bankers Association of the philippines, this is also bue of all
other associations: the thrift, the rural bankers, and so I am not really too wonierc
about abuses of the Central Bank, and ttrey will always be around.
We ban
4P
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0I992r
.:
CABANOS- Novembr 16, 1999 7:40 p,m,
always end up suing them il they are so criminal in their abuse of porers.
Mr.
Speaker.
REP. MORENO. Mr. Speaker, but for practical purposes, no bank,

rvhich
is still operating woutd like to sue frre Bangko sentral on an issue

that is premised
on policy wtrere abuse would be very difiicult to prove, Mr. Speaker.
Anyvay, Mr. Speaker, I think - ljust want you to raise that because its been
- | am disturbed with the excuse that, if the banks are alrowed to also underhke
ac{ivities pertaining to insurance; Mr. Speaker, then notring will prevent

these
banks from selling pesticides. Now, there is really no reasonable basis for
comparison, Mr. Speaker. I think tfte excuse is _ and I think the

Monetary Board
should fiankly say so that they are not familiar, probabty,

Mr. Speaker, wi$t
insufance activities. But the banking community, not onry
in Nortr Amedca brd
more so in Europe, Mr. Speaker, has long been into this field. And
it would be
very difricult for us to imagine comirrg up with a banking reform measure vvftich,
on the surface, arrows banks to engage or to invest in afiied undertakings,

financiar
as well as non-financial. And in the process, banks can 0vvn

up to 1$ percent.
But yet in reality, by disalrowing or by not grantino the auihority

to trese banks.
the Monetary Board negates what on paper is a good or a cornpefiive
environment, Mr. Speaker, a competitive provision. Would you

cars to commnt
on that? ...latc
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(P$Deprny SpeakerGda)
REP. IIOREI{C!. ... botqp td CerM Bmk b trcfi u,ill r[p.d b

rnodem artd rOrenc-E busines norms ard pracdcec, ff. 6perlrr. Fa
It|strnco, lfte bil b rllnt a3 to how rilrch a bank can ofri or [p b hfl nflJcfi can
a bar* own, lay an lnsuranoe ootnpafly. ls krstrrane dilprny cOnrltrrd er
an dliod or a rbn-ellhd urdftakhg?
REP. IAUREL. Yet, Mr. Spaokcr, krsrrarcs b conrldrrd n *d

lhandC uncler Seedon 27 ard th. ber*r are dld lfill omrrSrts of
hrnrrne crxnpank s
REP. llOREr{o. And do.i th. m.nrC of h. BnCF 6rrhrt lr bu-

book oorvpldon of fte Rules and Rerfddons of tto 8sgfto Srrfrl rbw e
mibank b own 100% dan krcurance coftFeny?
The potrt, tfr. Spm*er, - fun qr d*rlrdlttd

| dd nd wbh to ph
coile4ue m firat bstle - fle point b, tle h'r b sr+pced bdcteb the polcl a
pffi,tdo or dellne the polkf. tlo$evsr, ltrere aro so rnmy rsp.c$ h firod.Jn
banltkp ffi lt wqld be lmpoarlble ftr tre la\i b +ccilcdy d*rc |h.
r6grJery .fivfsmnt u,lfi .Epcct b meny of f|e!. S.cfr 8o lrf, *-
$pqkr. |he lrdency b, h 8n*o Srfrt trcrah lr krty Lrrl. b
Ctsr vilr}eofadror$on tr|r rsp.ot b trf dil anmfp f*
Ea.dltfr?ahr.&hvr,f*d i ftr frghnhg. Tlr Ofiid Brf*r3
lc( ar prspeQmr*drqh'}pTrrh. gtfrr, nd pt t| Ertcdr
nsld brrrl'cy"lrl|rtlbgt*d*rldr w - r o( lfi{t. rly l0e01
1S2, so ttif H-in nranydrr lrgfdirm bqr.d !hG. frn The hr-
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BRA( 4 Novemhor 16. 'i ( 7:tli p.m.
book manqal, each manud b as thkJr as thls. So hrt h nuty hdrncc tm

a
Eangko Scnhal had really unllaterdly or on its own and gfuqt tn vpld h our
Gq|grd Eanklng Ad had o{ttrd ffil

lts n{e-maf<hg por,rr by co|rilrg r+
trce mgfd*tns. Bui tF{ ae mair issus, ||t. 6p.*s, tld, lhfiq !r
Gancrd BoddnC Ad h6 b be wy bd b lb eoilf prfuH1
tpectrc o at
hts b d*re r|r- tro poLt.ftotfd ba rd not lett td poaoy <|rfnr*rdon
utftt ttd. Bagto SitJ. Fa hdenoc, h ttE d 3 rttdas$.Eg

trCet, a...d'-.no|'.fr!rrd.f, trt Sprrfar, I lc,dtry befi |hc Emgfto
8dfid, tllt'lftnUt,8oad;wtrlcfr dcbrmhcrffi alc atcd ard rtil m rpft
afiied. Andr'fuhdrryc"b..n tF gnCto Sdtrl ${dt ddrmb ril n
*drtr*htffihlrrtbdnrur*rlohl. Ard rfd nrrp do m
hart, F. epr|s, t|C lh"'fih*t Acd BqId bc Jur5our h fi! qtd

glyrr ft. -.aE.r fi. H( d poloy Crc{on h th. k
llfitrt.: *. 9tr, fp Ordnnn b dtrot T*t h [r cro

REP.
of trc ffi *d ftd ndt*d tr THl{ilEI rfFts* h qn d trs

d.fr..ddr ol$r,oalfrc, $m s. ll4grdon Hn rhodd d*rc
trtrd b lterftaadd ard rsr{nrdC CS.d ...
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Ofi0117
i1
BonSJlt! -1 NOVSMBER 16, 1999 ?:30 p.n
(PO - Defliy Spcal(Er gilas)
REP. LAUIEL.., ...Yer, Mr. Sp6.ker. This Reprssenteti0n b wltu l0

coniider lhe euggesllon.
REP. MORENO. Tha*you wry mrch, lh. Speaker.
I abo ha\re msrry'olhr commcf{r bul t wortrd ralhcr, llr. Sp.at.r - I
ha\,E given my word to my dirthgrdshed Chairman that I witt fim il my inlemBlalion.
Althor4h Mr. Spoaker, | $ttould metilrll lhat t will brtng to th! aflon{hn al th6
proper lim6 cfiain prortirions lhd this R|pres.rilation feh heva t0 b0 modlied.
On flnal polnl, Mr. Speaker ls, In lho Un{ad States recerdly, tho Gl|tt
Sleage[ Acl wa! viduslly repealed. One of lhe effecl8 of ttlis law wt$ch wa0
slgfled orily a few daye ago by Prgsider Clhton b to a{ow lhie ono-rlrop stop for
financial imtitliione. In fact, Mr. Spcakor, lhe adwr semcntf of many of lh8sr
ba*s hc||,dhg IJCPB where lhe ad\rllsemenl looks liko at of lhe$ \rafhur
tinenciil sorvicet cen he done by a rhgle gr0l{r 0r lfiilitrjtion -- servicei lfe

bar{fi0, q.ra$tbantdn0, btokerage, elc. Indrdhg lmurance, Mr. Spaeker.
Now ai il i$ now - as is lhe rde now, Mr. Speeker, if lhb Rcprctfltrthn
recElt, lhe Eengko Sonlral pwsuanl to or one of the books, Mr. Sperkrr, th.t I
haw mrribmd lsrlilr pr0vidos for a limitation lyith r6sp8ct lo lm owmrfiir of r

bank of an Ins$ance comparry, an insurance agan( and an lmurancc brokgr, llr.
Speekc..
Th. l.w i3 silont * thc Goneml Bar*ing Act h sitenl, Mr. Spcrftcr, wlh
fesprcl to th8l, bul og8h, tho Bangko scdrrl pureua,{ to [s rd! or orlrmbtr,
pwsuril lo lr nte malrfq powor had lrsucd rtgruhilofn ilmfiq tr oflJfitl#
v//
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, 00084
Bongrrlto 4 i{ovE[{BER 16, 1999 ?:30 p.nr
b0nk0 ln companlei lhat ere engegad In Insurance. l{ow, would lhl*
Reprcecnlation please be informed as l0 whal is lhe philosophy of ltn Bangko
Sentral is now wl{h re$pect lo this issue, Mr. Speaker?
REP, LAURFI. Mr, Speaker, if I am not mistaken, thls meller hae bcen
discu*sed wnh Central Bnnk and ihe Bankers Associailon of thr plilppher.
There is a m o\re from th6 Benkers Associelion of lhe phitippher to rrquorl or lo
be allowed lo sell then warFs In lhe hranches precisely refrrrfig lo the unlrrersal
banks lhat are nol only aflowed lo deat in alhed undcrtakirys bul abo nol}allicd
underlaklngs. However, lhe concern of the Cenlrat Bank ls lhal lhey are afr6H
thal if this is rllotyed, rve may end up +litner8ing in the diffsrort. bianohes of lho
commorchl banks the salo oF posflclds, and fed Aer$ as wel ar mutual funds
a$d h8u.ncc polcis. So rvo fsl lhal I ie belter lo ark that tho Monrtary Bosrd
bo tho ono lo authorEc whelswr ryarcs can be sold because lhorc b.I lcal 0n
lhc parl of lhe CeilrC Bs|t rvhrn it .lows lhe commcrcirl br]*t or u*wilel
bar*t to r.{, for ir'trn@,,'lRcurance thal thrrc, ls a guaradec fom lha'banftfng
tillfithnon,fic.gff,ledanfiflgot,tfnt b tor 8Nh. o wr ftt lttrt wf fiottrt xfft

.tow ttl|' tlonltery$odrd'do{*ru0.rd'| -.nd rcgulotbns whal rh00K,bc rlfowrd
l0 b! roH h lhi lootlrc of ltu wtwnail buic brilfies.
REP. MORENOi, ilr. Spfekrr, lh! rxcurr thet lhrr! brnkr mlgll ,rf,
pfflhldr3, I thht( brslyr lffl Ccilrst B*fr...
'00 0,'q6
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ABula - 3 Nw. 16, 1999 7:25 p.rn:
a
(PO - DEPUW SPEAKER GULLAS)
REp. MORENO. ...1l me emphastse,, Mr. Speeker, lho rlmple erpedlcncy
0f lh Bangko 6onlrsl sryFrg; nrnbrr 1, tnal thsrs is 0o quEliflEd .Flllpino lnvsslor
aflit, number t!r'0, lhf,l tn6 hoal'bank h dirtrosesd. Now, who d0l6rmin!ff lhalr
Mr. Spcaksr, thffFlso-tlttor?..Barsd 0n lho bilt, it is lh0 Bangko Sor{ral, the
Monotcry Boardi,'Atitl'lhrni [tr:, Spcaksr, lhat rssrnlhfly
lr,; Spoaksr, is th poir*. Thk cordd
rsErnlhfly is
be an opsdng, Mr. Spo{kor, lhal might atlr.ct cortain onterpriEing polonllal
ifwrltort t0 gt inlo thg local brnfting industry qsing lhs bacft d00r, it I may Eay
so, Mr. Spsaksr.
REP. LAUREL. Mr. $peakcr, the Genlleman froni Miramis Orienlal is

j
.l corrocl Eqaln thet the lsndency, s$pocialv with ths nvr govornor of lh6 Bamko
Set rel, is lo oncourage mergorE lo strengthon the finencial lnslitr.rtione:1.
Per3on0lly, I rvoukl rather

- lf | $ere I forelgn bank
- t would r0thcr go hlo t
mrrgrr ralhor lhan look for a dielracstd bank bccause il is hardar'lo mrkt lha
.ll
distrcssed bank rscowr bscauss of ths rspdalion and the bad nams. So lhe
I
I
I
boltar rrdry $.ould be lho margor.
I
On lhe sscond poinl whsr6 lhe Monetary Boerd, I think il iy compos;d of
E0v!n mrmDars, deliborataly jur( to ba abls t0 takO ad ntego of lho rllurlbn oail
t I
an hsltdion distrcssed, I lhink wc haw t0 qrvs morg crcdil to lha t{onefrry
Board. I do nol thkrk this would bs dona. However, if lho Gar{lcman from
i
Mirrmis orionlal feals lhat w0 should indicate some clcar provirions in lhc liw
I
':]
whrrr thr discrstion 0f ths Mon8lary B0ard coutd ba dhcclrd proporly, lhle
Rcprwcnlation.is more lhan happy to accspl th8 sugrosslion, Mr. Spc*er.
'l'l
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CJAgui Iar - Novembcr 16, J frllf l ?:20 p.o.
(P0 - Deputy Speaker Gullas)
REP. MoRENo. ... wlth reBpect to a snall local bank.

And ae you know, Hr, Speaker, the bte banke now, ev6n the
emaller banke, are already lnto exerclses leadlng to
nerg6ra, Mr. Speaker. But there could be banke which .nay
prefer to reaort or to conarr'"mate or 'to pursue nerger
dlecueelons on terna that are already acceptable to thern_
Or. their huDdlg,4rietea.could be a blt higher. And ntth the
llengera taling rrplao6lrlt&what will prevent, for lnetance, Mr.
Speaker', the .l{onetaly Board fron declartns that a aqalL
local bank le dletr.eeeed and that nu.nber two, thene ar no
quallfled Fillpino lnveetore? What are the cniterla?.
I thlnk the potnt here, Mr- Speaker, is, the Moneta-ry
Board, it eeema to ne, baeed on the wording of the blll, io
glven abeolute dlecretlon, Mr- Speaker, wlth respoct to thle
ieeue. And that could, Mr- Speaker, be open to rrhat mlght
be congldered ae breaching the bounds of nonnal or
prudential norme and practices, Mr- Speaker.
nEP. LAUREL. Mr. Speaker, the Gentleman la correct in
his concerne- However, we rcould l_lke to point out th6.t
there are really three condltlone that have to be l)roaent
beforo we allnw a forelgn bank to come lnto the plcturer
Flrst of all, that thls ie a dletreeeed bqnk or,an
a1f1ng bank ;
1"
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000?tt
02318 5
16, 1999 ?:20 p-n.
Seeond, there ls an abeence of quallfied Fll1plno

investot'6;
Thlrd, that the forelgn lnveetor must be quallfled aa.
well to 1nve6lr.
And the most .iml)ortant, , I thl.nk 1s, there lE a
temporary Eltuat1on ln th16 ca6e becauEe we are say.l.ng that
lnstead of cloalng the banklng li.lstitut,ion, tde want .to
ealwage or s6.ve the bank,.even temporarily allow a f,orellner.
to l>ut capltal. That 16 the Bltuatlon belng eavlalond, Hr.
Speaker.
REP. MORENO. yea, Mr. Epeaher. But what thle
Repreaentattlon la concerned t6 the poBsl.bll1ty of abuec. We
have Eeen, Mr. Speaker, the. acquisltlon of ptUf, the
controlllnB bfock of PLDT taklng place lD 6uch a rocord
time, Mr- Speaker. We have seen t-.he merger of pCI and.
Equi-table Bank taklng place, or the acqulaltlon fLrtst by
Equltable of PCI taking place agaln in record tine. And ln
both lnatancea, I,Jr. Speaker, 'there had been Eerloua
lnBlnuation6 , that ceftaln groupB or certaln paxtle8 of
per8onalltles were lnvolved in brokerlng or naking posslble
theee deals to be done, earning in the proc666. huge
cormlaslona, Mr, Speaker _ And given the dlrectlon of the
banklng system, Hr. Speaker, which ts nergerg and
combinatlons, then 1t may very well be that many of these
forelgn banl<e whlch are expandlng lobally, Mr. Speaker,
r
could really be eyeing at some of these local banke.
Page 2
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0231f5
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CJAguilar - ., November. 16. tl)llli 7:2O r., m
a
And the r:asier. way -vlhaL tlr js ll(-pre sentat lon, Mr.
Speakcr, is ,sar,/inE. rssumjn,l {h;rl, I,lrlr'., ir; 1.hat will to do
j L, i t, vl6rll (l l),' ,jr r.1, r1i,rf :v f o1 a f rrr.,, i r'1 [r-up
tO ACqUire a
J-'rcal lranl< not, i,hr'orrt l'l t,lte )rlrna I ls rrnder the Fofelgn
r,lrarrnr..
llarrlt [,1]ter.aJ-irlf ir,n I,ari .rl ufrl.,r. i 1,,. r.r.oposed measure

all-owing 40.pr,.rcent o.v,'uercitj l,, l1r. ljr..:aller, but by the.
s i.nrFle-aga in , let rnr: emphas izc .- . ':, :i t
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Mllunf\ November 16, 19i, l
7:'10 p.m.
(P.O. - Deputy Speaker Gullas)

t
REP. LAUREL. ...We are now following the control test. That is the
citizenship of the indiVidual stockholders, followed citizenship of the coqtrolting
stockholdErs of .the'corporation.
REP; MOREN0: But it seems to be not \,rery clear, Mr. Speaker.
REF.1$AuREll'$,.1f-the,G6ntleman witt allorv this Representation, there is an
amndment being+suggested changing the grandfather rule and I would like to
read it if. . ..
REP. MORENO. Perhaps, Mr. Speaker, we can take that up at the period
of amendment so that I will not consume much of your time.
REP. LAUREL. Okay.
REP. MORENO. But anylvay, Mr: Speaker, I think it needs closer Scrutiny .
o becauBe there is also a rule as to the limit with respect to foreign or.members of
the Board of Directors who are not Filipinos. . And while thrj provision, the
proposed measurs provides for a two-thirds limit to be Filipinos, at least hro-thirds
must b Filipinos. There is a provision that allows greater number of foreign
members of the Board to reflect the representation of foreigners, Mr. Speaker. lt's
just unclear, Mr. Speaker, as to what would be the tesl used with respect to
foreigners being allowed to hold more than one-third of the membbrs or of the
Board of Directors. lf we were to use grandfath", or. .ont ol lEEt v,,itt ,"rp*f to
ownership, that shor rld also be used for consistency as basis with r*pect to
membership in the Board of Directors, Mr. Speaker.
t\/
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November 16, 1
the next five years.
voting stock....zm(
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LEDESMA - November 16. 1999 7:15 p.m.

"
a (PO - Deputy Speaker Gull'rs)
REP. LAUREL- ---G0o,6 of the votinq stock of another bank pursuant to
Repubfic Ac.7721 or Republic Act 7906, then it may own only up to 40% of the
previously distressed investing bank
REP. MORENO. Yes, Mr. Speaker, but qiven that the Foreign Bank
Liberalization law already provides for that possibility and given the atfaction as
far as the market or the attraction of Philippine banks specially during tims like
this, Mr. Speaker, vis-a-vis tlre foreign banks, this Representation fears trat tris
provision might be used to virtually sell local banks to foreign banks, ouiside of lhe
regular channels, Mr. Speaker, 'so to speak. True, the Foreign Bank
Liberalization lgw provides for the mechanisms under rrvhich foreign bahks can
acquire a localbank'up to 60%. ,True, foreign banks can or/n up to 40% trrough
normal channels,unftre,.nqgnosed bill. Honrever, Mr. Speaker, ihis provision
virfually negates ttre,40%.limit or, can virtually nate th 40% llmft undgr the
propoed measure or the 60% limit under the Foreign Bank Liberalization Lwv
with tre simpte ergedienryrof tre Monebry Board, Mr. Speaker, determlning H
a locat bank is disbessed, No. 1 and that there are no qualified Filipino invbstors.
Would you care to commont on that, Mr. Speaker.
REP. LAUREL. Mr. Speaker, the Gendeman is conec't. Thero is really no
specific provision ttlat would allolrv the central Bank to be controlled. Horvever, we
would like to remlnd he Gendeman from Misamis oriental that there are no
Filipino investors that are gualified to invesl in a disfessed bank and shall we
allot/v th6 distiossd bank to ford up? Because if this is our attitude, w6 just allor,
. ,,,
s/lt
, 000T6
r-soEsnn - tr'l November 16, 1999 7:16 p.m.
tre bank to fold up wtrich we all knqv will be more expensive, tnn vue do not have
to allolvrlhe,fordgtHFqfusome into fre picture.
REP, MOREMII$MnrGpeaker, lest,tris Representation be misunderstood,
I am not against savtng-Utstessed banks. ln fact, that is a role dr.srai is orie of tre
tasks that the Cental Bank, Bangko Senkal, is supposed lo do in order to
preserve and nhdrioeconffdence In the banking system, Mr. Speaker. flowever,
the point trat his Represenbtion just rvanted to touch was, the present wording of
the provision on$ has trvo qualiftcations, Mr. Speaker, before a foreign instihrtion
ot bfore foreigners can o$/n up to lm% oJ a local bank and tris is much inore
than the 40% limit in the regular channet, 60% limit under. the: Foreign,Ba1k
. Liberalization Law as well as the foreign branching under.the lder law. ThiS
prwision allows.a foreign bank or a foreign group to own 100% with the simple
expediency, Mr. Speaker, of a resolution issued by the Monetary Board. Just that
this Representation fears that this provision exposes or could be an oppOrlunfi,
Mr. Speaker. Let's say, for instiance, just to be very specific. There could be
some problems with respeci to a small . .. tel/

DOMINGO.3 Nov. 16,1999 7:05P.M.
REP. MORENO ...rule making covering institutions that are not ven
within its primary role or within its mandated function or task under the
Constitution.
REP, LAUREL. yes, Mr. Speaker. This question was also touched by ttre
Gentleman from Misamis orientar rast Jury 12 during the interpeilation period.
Perhaps, our good friend, congressman Moreno mav stifl be abre to incrude
this
suggestion in the Bangko Sentral nq pilipinas Charter. Although in today,s
meeting, we had decided in principle to pass ,pon the Centrat Bank Act, there
ls
still time to make additionar suggestions or amendments which may

be adopted
by the Committee when it reports to the plenary hall
REP. MORENO. Thank you, Mr. Speaker
ldo have some suggestions on that issue, Mr. Speaker. Golng to anotler
point, let me try to be as brief as possible, Mr. Speaker. With respect to
limitations on orvnership, and there are many subsets with respect to ttis issue.
And the limibtion pertains only to voting stock. Now, and in Section 10 of the
proposed blll, for as long as the bank does not lssue no par value stock then
lt ls
tarrty drscredonary on fte part of fiat bank as to the classncadon of th6 stocl thEt
it issues. And you will ptease note, Mr. Speaker, that ownership
rules or celllngs
wi$ respect to bankoincluding"bank-holding corporations,

are confined to voting
stock. Now, Mr..Speaker;,Would the distinguished Sponsor be willing

to a
possible proposal, Mr. Spaker, that there

should be a limitation as to the numbr
or percentage of ,non-voung or non-common stocks that a bank may lssue.
000?2
018 3 24
i-,
DOMINGO - 3 Nov. 16,1999 7:0SP.M.
Because it will be very easy, Mr. Speaker, for foreigners to efiectively o\m more
than the prescribed ceiling because the ceiling refers onry to voting stocks and
that celllng does not lnclude preferred stocks. whlch are non_vodng. Nolrv, thls
Represenhtion feels that we may - the raw may have to provide a ceiling as to the
issuance o{ the non-common stocks with respect to banks, Mr. Speaker.

Would
you care to comment on that?
REP. LAUREL. Mr. Speaker, Genfleman ftom Misamis Oriental,'this
Representadon- rs'opn"to,,any specmc suggesflon concemlng-

the non-vodng
shares in banking.inditrdons.
. REP. lrOREfl(ilfimghkryou"very much, Mr. Speaker. Now, with respect to
again, to the citizenship requhement the present law provides for the
grandfrtherrng of share olflnershlp ,.e. where a slockholder rs a colponrte
stockholder, the clflzenshlp ol the slockholders of that corporate stockholder ls
taken into account in determining foreign ownership of the bank. However,

in ihe
proposed measur the grandfathering, no longer exist. ls that designed, Mr.
Speaker?
REP. LAUREL. Mr. Speaker, Gentleman from Misamis Oriental, In

fuct thls
sectron that we are refeffrng to ls no ronger roflor/vtng
the grandfather rure. we are
now .. ./mvd
000?8
018 3 25
November 16, 1999 7:00 p.m.
:
a
_,,_{po=-DEprrry-spEAKEEGuLras} -
lly is with resPe#{G'- --'-

$ese instirtrtions.
REP. LAUREL. Mr. Speaker, the General Banking Act, as is being
pregntg! to ffrg llguse today, covers the power of the Central Bank over
monbry polict, arrf ttirs is qAFre rhe slrF rvisit - not sqnrvision... this is
@sd-mlvffirefcomeu@
Board rules and regulations.
REP. MORENO. I understand, Mr. Speaker, but the problm is, therg is
nowhere in lhe bill, and tlerg Ls no\qllgre in the larv, or in the la,nvs now in place, a
Pro"ision that rays:thatSeofalSank shall no{ tauch 91 thesa kinds of financid

-@anf mentioruf -wtratlhrsffi
over the years - that the Bangko Sental had issued circulars, mernoranda,
,e&gtere,-e!Fq!!S14 only banfi, fot only quasi-banks, not onty ty{ compani,es
---- -hrt-rl[ o{her financial institr rtions or financial intermodiaris-jdudltrg-.lh6s
---udffi6trquaTllnntrrqftrnctiorrs:So thsreisftroa c.rnftFion - u-rprrdbdirr=---'-

-
:Speaker{.ifr rTeect to tfiese financial irilermediaries. We can say it is the

_
__ SEcurities and E2g.hqryq Cgmrnlgltgq44it vefy ctear, Mr. SpeaEer, that there
F
i6 $'la$l 'u*$is ecprsentation hed jndhated'apd trlers,jc no r+gurorh"l oa tr+ - *_=____-
- -&nuko futr.ftrEt Eys thrkngkosentrd sHi-not, oremr ue-rimipc-trrur-k-
i
vtvERo - 3 November 16. 1999 7:00 p.m.
jetpect ta ns lq!-e q9 rogards lhese financial intermediaries, Mr. Sp_ak6l. _!j!gg,

Speaker,l am iust-saying hat" Okay-werre cnfiing firis law]uiidattflilt-
---- EerenftlTFBangkoSenH fiorndoinfthingqMr. Speaffihat are treyordtfie---
-Mr.
coverage of this bill but which are not prohibite.d as far as these la$|S are
concerned to be done by the Bangko Sentral.
eriental rnay want tro prepose a see-iion in the Csntral Benk Act that gouHorer
--
tlits Ftrcf ted FoElem.
REP. MORENO. Mr. $peaker, just for the record also, Mr. Speaker, the
-
reason for my asking that is because the Bangko Sentral had focused its atention
oqrul+ftr*inq, Elq$iasfiao-e@e-rc- MrSpgaker, bqt neglecting, if I may sal, so
esnstit{ieaal -rele nAich is. os I have read edior-lft'-

primary-GoiigitXionatTamEFofthc Baffi
----5pea*er,fne
pro/i& polirry diredion in the areas d money, banking and cardfr. llow, and one
ara, Mr. Spedrer;where he Bangko Senbal tlad been limid, il I may

sey ro, b udh repeet torbrehn,bQlrq$/in0s.
-,
come incltding those that are di{ wrborn, and this Represenbdon is Ju* at a loes
1!lg qhat{e phitosophy ol.te Bangko Senbal is with reoped to brelen
- --- fofiwlttgs-{ivefL-Orat fts f,nubad ieon devoted, Mr, SBOAkef. b lu|e-
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November 16, 1999
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REGODON.3 November 16, 19Sg
And so, Mr. Speaker, I just wanied to find out ihe.philosophy of the Bangko
Sentral's role with respecf to institutions that are not balks, that are not tust
companies and that are not quasi-banks. Because we may say thdt the proposed
measure is silent on that, or does not louch in explicit or specific terms ofl what th
role of the Bangko Sentral really is. However, Mr. Speaker, the danger is the
Bangko Senfal, via its nrle-making power, may issue rules and reguhtions:
pertaining to these institutions. And I would like to know what ttte Bingko ,
Sentral's ided is or philosophy is, for the record, Mr. Speaker.
For the record, they can say that they want to regulate, they want to
supeNise these financial institutions, and this Representation rll'ould acCept ttrat.
'
On the other hand, Mr. Speaker, they can also say that they will not touch th6se
institutions and this Representation will accept that. What is important, . t!rr.
Spegkor fs, for: the re@tcl, this congress Is ,tu[y aware of what the iole d the .
Cejes-3 Nov. 16, 1999 6:50 p m.
REP. MORENO. ... is to deflne and follow the mandate of the Oonstitution.
Now, the first objectiye under section 20 of the constitution, Article xll, as,hr as
ihe Bangko senbal is.concerned, "shail provide poricy direction in the areas of
money, banking and cr6dit.a .
And the soond;,as per the same Section is that, "ir shall have supervision
over the operations of banks and exercise such regulatory powefs may he
1s
provided by hw."
So, as a mafter of inierpretation, Mr. Speaker, insofar as the supewisory

{
)
powers of the Bangko Sentral are concerned, the Constitution mandates
supervision only with tespect to banks, and that as rogards the regulatory porver,
.t
I
and this is not even supervision, much wtLld depend on what the lavr prsvides,
And, Mr. Speaker, the proposed General Banking Act, tro this
Representation's understanding, seeks {
to cover not only banks, but odfter
instituiions including quasi banks, and may I please get the thought of the
distinguished Sponsor on that, Mr. Speaker. *
Iam sorry. My question, Mr_ Speaker was, does the proposed nreieute i
P
I
seek to cover, as far as the supervisory powers of the Bangko
Senfal are
concerned, not onry banks but other financiar institutions?
And if so, Mr.
speaker, wfiat are lhese orher financiar institutions that

the proposed'm@s.ne
seeks to be supervised by the Bangko Sentrai?
I !..-. i.-i,.-r:*. '". i i. .,,".1.r.t,i'i lin;i''L$

LEGf;SLAl"IUI AIiCI-itv[5
Cejes-3 Nov. 16, 1999 6:50 p,m.
'l
'i ,'l
1
\" 00@?
MALIWAT-.1 NoYenrlrer ifi jgllg 6:45p m.
(PO _ NEPUN'SFEAKER GULLAS)
so thet precis$, Mf.
and oonsideratirn at
Mr. $peaker,'uril be
,tr ooffint
MALIWAT - 3 l{ovember 18. 19gg 6.45p.m. 2
independent central monetary authority, the mer,rbers of wtnse gwernlnE

board
mrst be natural bom citizens of knolvn probity, ir*egrity aftt patriotism, the
nntorfiy otyfiol.nstlahsome trqrn the private sector. They st*afl also be subject
It shall have supervision over the operdtions of banks and exercise suct regL[atory
powers as may be provided by law over the operations of finance comoanies

and
other instihttions performing similar fi_nctions."
The second paragraph of tfis Secfion, Mr.,Speaker, reads as foloyrs, and
I quote: Until the Congress otheMise provides. the Central Bank of the
Philippines, op"*,,ng uflder existmg laws. shat frfiction as ttle c*ntral monelary ,,
authority. "
Now, pursuant to this mandate, Mr. Speaker, Republc Act No_ I*3 was
passed, Establishment and Oroanization of the Bangko Sertral ng Fifipinas.
However, Mr, Speaker. now pendinq in this august Chamber is nd of{y tho bill
lhat seeks to amencl or reDeal the (lenerel Banking Act, lli also otftf bi[E that
are intertwined wfrh the ceneral Banl{nq Act The bills, to. namo sflne, Mr.
.
speaker, are. {r) the r)iil amendinq the Banqko sentrar Act afld othsr b[k, Mr.
speaker, incfuding rhe hirf on the Financinq company Act. AH

I ufttcfstend, tfiore
is also a bill on the Bank LiberalDalirrn Law
Btd nonetheless, Mr. Speaker. I thtnk 1,vhat this Coruress

has to do is to
defne . . .l
fq
$ANTo$ -'3 November 10,1999 6:40p,m
P.O. - Oep. Speaker Gullas
REP, LAUREL. . . . tuiisamis Oriental. But before that, Mr. gpeaker,
please allow me io give a siatenieiri.
THE DEPUTY SPEAKER (Rep. GLilias),
Chairperson may proceed.
REP. LAUREL. Thank you, Mr Speakei-.
. if you recall, Mr. Speaker, tlie Cornmitiee oir Banks was finally organized
Decenrber 1993. This was one of tire last c;omiitifiees to be organized. And
ihe leadership was ruslling the coritniittee to woik on the General Banking Act:
Anei so by February the committee reported tire General Banking Act, and we
were scheduled to sponsoi fularch g. For soine ieasons we did noi. And we
were scheduled io sporrsor this h,ill, severai iirries postponed, much to oui
regret because we l]ad to inviie our resou.ce peopie ilJainly from the Cntral
Bank to be heie. i believe five or six iimes they were itere only to be told thai
the bili was not giing to be discrjssed. Finally, two month$ later this was
made, the sporrsorship siaited. And 6,1 questions were asked in alnrost seven
hours, two minutes nroie and it would have teen seven hours. Congrosman
Espina aSked 19 questions and he used one hour and twenty,minltef,.
o congressman Gunigundo, three days of interpelration, asked 29 quesilons,
consurted fourchours;d;riir:fhen.,.Congiessman Moreno asked six quesliOns

and
he consumod onsortour.and"three.minu'res. And fi nafl y

congressman Apostol
r:
SANTOS - 3 November 1A 1$99

t
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:) SANTOS-4 November'lO, 1999

t'
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P.O. . Dep. Speaker Guilas
,l
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.lt REP. BARBERS: , , : I do not wish to interpellate the Ghairman of the
i
Banks and Flnanciql"lnslitutions but lwould just like to make a short
manifestation, Mr, Speaker.
THE DEPUTY SPEAKER (Rep. Guilas). ptease proceed.

REP. BARBERS. Thank,vou, Mr. Speakef.
;
Mr. Speaker, yesterday as we were voting on the Budget for the year
rl
..,]
.:.1
2000, as much as lwould like to register likewise my negative vote on thE said l
i:l
,! Eudget Bill, I was unahle to do so because of the fact that I was not available.
i;i
H
ti Mr. Speaker, I prepared a two-page speech which I wish that th6
1:j
iiI C^^r l^;^+ ..,^,.t1

Secretariat would insert in the reeords, Mr. Speaker,
,:l
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ilo
it'l
THE DEPUW SPEAT(ER (Rep. Gullas). So noted.
REP. BARBFRS. Thank yor.r, Mr, Speaker.

't
THE DEPT TY SPEAKER (Rep. Gullas). Thank you, distinguished
colleague from Surigao, the Honorable Barbers,
REP. GONZA|EZ (R ) Mr Speaker
THE DEPIiT SPEAKER (Rep. Grrilas), The distinguished colleague

from the Lone District of ltoilo, the Honorable Raut conzalez, is recognized.
REP GONZALEZ (R.). Mr Speaker. I am scheduled to b the next

interBellatol, but I had been making a mental rotl call of the Members
on the.
Ffoor and I find that there are real,ly 220 Members on
the Floor minus 200. Mr.
Speaker
0obfts
|q. 1 y1.''l
i.' i' rr :l
IUt
16 Novernber '1999 6:35 p.m.
REP. ESCUDERO. Mr. Speaker,
THE DEPUTY SPEAKER (Rep. Guilas). The distinguished Deputy
Majority Leader, the Honorable Escudero.
SUSPENSION OF CONSIDERATION OF H.B. NO.5168
REP, ESCUDERO. May I move that we, in the meantime, suspend
further consideration of House Bill No. 5168.
lso move. Mr. Speaker.
THE DEPUW SPEAKER (Rep. Gullas). Are there any obiections to the
motion? (S ence) Thei Chair hears none. the motion is approved_
REP. ESCUDERO. I likewise move, Mr. Speaker. that we in the

meantime suspend further consideration of the Business for the Day.
THE DEPUTY SPEAKER (Rep. Gullas). Are there a-ny objections to the
motion? (S/ence) The Chair hears none, the motion is approved.
REP. ESCUDERO. Mr. Speaker, may I now move that we resume
consideration of th Unfinished Business.

I
' .THE DEPUTY SPEAKER (Rep.

Gultas). Are there any objoctions to fto
motion? (Silenot)ftThlffBhair,hears none, the motion is approved.
,CONSIDERATION
OF H,B. NO.6S14
Cqntinuation
Period of Interpellation and Debdte
000$*
HOUSE CF RIIs}TqSfiNTATNfES
Iq.-rjl
Ffller
sr
{i.,. . -. 09727
- _ t
16 Noven'rber 1999 6:35 p.m.
r\f,r. ESCUDERO.
REP. cevvl./c.nv. Mr.
tvtr. Speaker,
DpeaKer, may I nolv move
I mal we
movg that we Igsumg
1
consideration of House Bill No. 6814 containing Committee Report No. 266
and request the Secretary General to read the title only of the measure.
I so move, Mr. Speaker
THE DEPUTY SPEAKER (Rep. Guttas). Are there any objec{ions to the
motion? (s/ence) The Chair hears none, the motion is approved.
The Secre{ary General is directed to read only the tide of the measure.
THE SECRETARYGENEML, rcading: House Bill No.6814, entitled:
?N ACT PROVIDINGE,FOR THE REGULATION OF THE ORGANIZATION
AND OPERATIONS.OF'BANKS, QUASI BANKS PLUS ENTITIES ANO FOR
OTHER PURPOSES."
THE DEPUTY SPEAKER (Rep. Gullas). Thank you.

o REP. ESCUDERO. Mr. Speaker, our parliamentary status insofar as
this bill is concerned is that we are in the period of interpellation. May I
therefore request that we recognize the distrnguished Chairman of the
Committee on Banks and Financial Intermediaries, the Honorable Laurel.
THE DEPUTY SPEAKER (Rep. Guilas). ts there any objection to the
motion? (Si/ence) The Chair hears none, the motion is approved.
The Chair recognizes our very distinguished, hardworking Chairperson
of the Committee on Banks and (Einancial) Intermediaries, he Honorable
Macario Laurel lV.
ooo6n 4
09727
r1
tli I
,1
Dacillo3 16 November 1999 6:35 p.m.
REP. ESCUDERO. Mr. Speaker, to interpeilate the distinguished
Chairman, may I request that we recognize the dis$nguished Genfleman from
the First Dishict of Misamis Oriental, the Honorable Moreno.
THE DEPUTY SPEAKER (Rep. Gultas). l-hank yoir, distinguished
Deputy Majority Leader. The Chair now recognizes our distinguished

colleague from the First Distict of Misamis orientar, the Honorabre oscar
Moreno to begin or resume his interpellation.
REP. MORENO. Thank you very much, Mr. Speaker. Thank you very
much, Mr. Majority Leader.
Mr. Speaker, the distinguished Chairman of the Commitee on Banks
and Financial Intermediaries be willing to yield to some questions, Mr.
Speaker, on the proposed measure?
REP. LAUREL. Mr. Speaker, of course, this Represenhtion is more
than willing to answer the questions of the Genfleman from Misamis
Oriental. .. ./cpd
(
0ousf ry
09727
{1 :-.,
SANTOS.4
7:50 p.m.
RFSTJMPTION OF $FSSION
At 7:52, p.m., tlre ,tesslon w'a,s resumed
THE DEPUW SPEAKER (Rep. Guilas) The session is resumed.the
dlstinguished Mbjorit-v Leader, the Honorable Mar ftoxp".
. REP. ROXAS. Thankyou, Mr. Speaker.

'me
Mr. Speaker, it seems that the other 2OO Membe!'i quickty,
lust on
last one minute or so left the Hall. So, perhaps the observation of fie
Gentleman from lloilo is correct, but there were 200 other Members on trre Floor
until about one or-!r1vo minutres ago, Mr. Speaker.
$USPENSIONOF CONSIDERATIoN oF H,B. No.681II
.l
,l
:l
l
consideration d,the:mga$re
il
THE DEPUTY SPEAKER (Rep. Gullas), ls there any objection to,fte

motion? (Silence)
The Chair hears none; the motion is approved.
REP. ROMS. Thank,vou, Mr, Speaker.
Mr. Speaker, just a reminder to our colleagues, again ths

Secrhry
:'
November 16 1999 7:50 p:m.
the Honorable Sunshine Joe ASpiras here at the
the same.
I so move, Mr. Speaker,
THE DEPUTY SPEAKER (Rep. Gultas). ls there any objection to the
motion? (Silence,)
The Chair hears none: the motion ts approved.
The Secretary General is directed to read only the title of the measure.
THE SECRETARY GENERAL. House Resolution No..1234, entitledi
"REsoLUT|oNToEXPRESsTHEcoLLEcT|VEcoNooLENcE.oFTHE
MEMBERS OF THE HOUSE OF REPRESENTATIVES TO THE BEREAVED .
FAMILY OF THE LATE MAYOR ROLAND SERING OF SURIGAO CIW."
THE DEPUTY SPEAKER (Rep. Guttas). The distinguished Majority
Leader, the Honorabfe Mar Roxas.
REP. ROXAS Mr Speakei, it is always a sad"event when fhr is a
death, even more so, Mr Speaker, Your Honor, when the death happens to one
so young, to one who is irrst starting his life and to one who likewise in starting
out his life is starting his service to our nation. That is the sad fate lhat befell
l
Mayor Roland Sering, scion of a distinguishect family from Surigao

City, frV
,t
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I
SANTOS-4 Novemborlfi lgqq 7:50pm
a
has served long and hard the noopto anrj the constituents in
Surigao Citv.
ADOPTION OF H RES NO 1234
nccordingly, l\.4r Speaker, Yorrr Honor. nray I move that the Chamber
ttnanimnuslv ,,
000ii6
MALIWAT - 4 Noveilllrer I fi. 1 !Jlli 7:55p.m. 1
(PO - DEPUIY SPEAKER GULLAS)
REP. RO)(AS. . . . unanimously adopt lhe said resolution. I so move.
Mr. Speaker.
IHE DEPUry SPEAKER (Rep. (iuilas). ls there any oblectbn fo the.
motion? {srbrfs}. The Ghai hears nonei the motisn is unqhimorrslt/.ad$ted, .
REP ROXAS: Thankyou, Mr. Speaker.
Fortltqfccbtd;c$tlirfiH*nou$ adoption vrill lnctude the ?00 other Mofibers
who have just l6ft the sssroo Hall. so that it will be the 220 Mernbers who wodd
have .
THE DEfttfY .$FEAXER (Rep. cufias). Thank
distrUuished Malority Leader So noted
REP- ROXAS. Mr. Speeker, tikewise, noh/eithstandng ths rnanftnous ,,
:
adoption of the same, may I rnove that all the,Menlbers of the Hou5e b made
coauthor$ of the measure. I s0 moye, Mr. Speaker.
THE DEPUTY SPEAKER (Rp. Guilas). ls there any otfrlction to the
motion? (Srrbrrce) The Chak hears none. the motion is approved. 1
REP. RO)(A$. Thank you. Mr. Speaker.
Firully, may I ask that the Secretary General be dlrected to transmil a
copy of the said resotttion to the hereaved family of the lafe Mayor
Bohnd Sefhg
and to designate lhe Honorable Rohert "Ace's garters as th ofllclal convoyfi
of the edreme condolences and bereavenent heinq offered

by the fhuse Of
RepresentatMes. I so Inove. Mr. gpeaker.
noffiit
xr"
BRACIA-1 November 17, 1999 5:00 p.m.
I
a susPENsloN oF SESSION
THE DEPUW SPEAKER (Rep. Abueg). Session ir susporded-
Itwas 5:02 p.m.
At 5:03 p.m., the -qcssion wrs tlsumtd.
THE DEPUTY SPEAKER (Rep. Abueo)' The seasion ls rssumed.
The dlsiinpulahcd Maiorlty Floor l-cader'
CoNSIDERATION OF H.B. l{O. e614

ON SECOND READIIIG
REP. TEODORO. Mr. Spoaker, at this point I move tfirt w' Procd to
the Unfinlshed Buslness and procesd to onEidgr Gommlttse Roport i*0. 200 on
Housa Bllt No. 6814. lso move, Mr. Spcaker.
THE DEPUTY 8PEAKER (nsp. f.Oueg). No obJecdon? (Sfrcncc) The
Chalr trun nonolhssstp h'approved.
REP. TEoDlffiOi*llft."pcekor, I nour requd thst $e Eccrctrry Goncral
be dircciled to rqd'the title,only of the bill. I so mow.
THE DEPUTY SPE I(ER (Rep. Abueg). Ttn Soclcby General is
direded to onty tho ti[s qf h blll.

'!d
THE SECRETARY GENEML. Houre Bill No. 681tt, ontl[d Ar'l ACT
PROVIDING FOR THE REGUI.ATION OF THE OROAI{trATION AI{O
OPERATTONS OF BANKS, QI'ASI-BANKS AND TRUST ENTITIES AITD FOR
OTHER FURPOSES
THE DEPUTY SPEAKER (Rcp.Abueg). Th dlstlnguirhd Mqlodty Floor
Leador.
00( :ti
/-\
| '... t
BRACIA,.I Nqrmber tt, tt*'t'''' 5flp.m.
stfsffiFH'l{ OF SESSotl
REP. TEODORO. Ur. Spr*er, I tpwmonlbrron 'mharrernlon

bffiftof. |ronpn F.+.rftr,
;. Srolm b elprlsrd h otff
REq.FnONOFSESSOiI
TtE OEFiITYEPEAI(ER' (Rrp. Altf,g)' Ttt rsHt b txd'

Tfr d*gddtdllrlotfrf 'fbor td.
REP. TECffiO. llr. Sprdrr' I lw rnonc lhd s rrog:b frre
dLnff frq|l blo olty, uc tbrqtbb'ftd oonalc -..
-3-
' it\ '-'l
,, '' CABANOS ' 1 " November 17, 1999 5:05 p'm'
| (Po - Deputy SpeakerAbueg)
:1
; interpellate the Sponsor.
THE DEPUTY SPEAKER (Rep. Abueg). The distinguished Gentleman
THE DEPLJTY SPEAKEI? (Rep. Abueg) He may if he so desires.
REP. LAUREL. Mr Speaker, willingly
lo THE DEPUTY. SPEAKFR (Rep. Abueg). The Gentleman from lloilo Citv
may proceed with his interpellation.
REP. GONZALEZ (R.). Mr. Speaker, my first question may not really be on
:
i i the bill. But lwould like to ask the distinguished Sponsor if he can tell us whelher
,.1
,:i
all the banks in the country, at this time, are already YZK complianff
,,j
,.i REP. LAUREL. Mr. Speaker, I believe so, those big banks. Because the
I , small banks, like the rural banks, they are not really affected by the Y2K problem.
;r
REP. GONZALEZ (R.). I ask this question, Mr. Speaker, Your Honor,
because I knowthat underthe'lawvyhich we have approved on compliance ofour
:,..; preparations for the millenniurn#there is a deadline for all critical agencies. And
that was the reason why there is even a Presidential Commission which has been
set up in order to monitor and see to it that this compliance is properly done. But.
,,U
(y
t/
' 00(,e0 -
0899
lJovember 17. I gqq
,I
CABANOS. 5:05 p.m.
Your Honor, what you are sayino is, you believe that hanks are already compriant.
But do we have any forrnal report on this?
REP. LAUREL. To my knowledge, Mr. Speaker, Genfleman from lloilo. the
central Bank has created a special body that only attencled to this requirement.
And each bank, including the small rural banks, are given certifications that they
are compliant. And as far as I know, this has been complied with.
REP. GONZALEZ (R.). yes, your Honor. This question must be asked
considering the critical aspect of this, even on the economy and on people who
have their money in the banks. lf by the middle of December for example, people
will perceive that not all banks are compliant, this will cause massive withdrawals
[ofl(on) banks, and it.will"dislocate the banking industry. That is why it is very
important that this must'be properly monitored and checked, and aciually
- check
and recheck in order to give confidence to the people of this country, your Honor.
REP. LAUREL. Perhaps, Mr. Speaker, we can request the Central Bank to
give us a certification to this effect.
REP. GONZALEZ (R.). yes, that's why I raised this question, your Honor.
Because we are debating our Revised General Banking Act of 1g9g, but if
a lot of
banks will fall or collapse because of our failure to have this compliance,
a lot of
our efforts here will go for naught, your Honor. so I think that it
would be better.
Your Honor, if the committee, the distinguished chairman can rook into
this ". lalc
,{0)
v
0Ct 21
089{
il
Dacillol 15 November 1999 5:10 p m
REP. GONZALEZ (R.). ... look into this and make a report to us before
we finally approve this bill here, your Honor.
REP. LAUREL, Yes, Mr. Speaker. As soon as we have the reply of the
Central Bank, we shall report this to the House.
REP GONZALEZ (R.). Under Section 6-d of the otd RA 337, and it
seems there is no counterpart provision here in House Bill No. 6914, so I would
suppos, Your Honor, that this is actually the effect, lt $ays that the M0netary
Board may, at its discretion in specific cases where the circumstances warrant
require a bank to engage the services of an independent auditor to be chosen
by the bank concerned from a list of certified public accountants acceptable to
the Monetary Board. My question here is, firsi, your Hcnor, I would suppose
that you are vely much ar'va re of this since you have been an executive of the
bank; can you teli ns who supply the list for this certified public accountants
which may be availed of as an independent aLrcJitor bv h bank, your Honor?
REP LAURET_. We are of the understanding, Mr. Speaker, Gentleman
from lloilo, that this requirement of the central Bank which is being
rncorporated in the revised ceneral Banking Act, the central Bank

will submit
or vrrill prepare a'list of the acceptable audit frrms in the country
from which list,
the commerciar banks or the universar banks as weil, wiil serect

which
institrtlon they wo.rrd rike to hire to do the audit of the
bank and this is then
submitted to Central Bank for their approval.
AU',:'1"
as73
i
Daciilol 15 November 1999 5;10 p.m.
REP. GONZALEZ (R.). So. in other words, in effect, the Central Bank is
the one which chooses or sets up the list of this reputable audit firms. And
from that list, commercial banks may choose vrhom they would like to hire as
their independent auditor?
REP. LAUREL That is correct, Mr. Speaker.
REP. GONZALEZ (R ) Does this imply,' your Honor, that the
independent auditor Works or.itside the banks on anditors by themselvesr In
other vrords, right nou/, I think we harre tv,i-o sets of auditors in the bank - the
internal and the eyjernal audit. Novr, where r,vill this come in? lf this is an
independent auciit, this is the external aLrclit.
REP. LAUREL. Mr. Speaker, Genileman from lloilo, this matter has
been discussed vrith the central Bank and our r-inderstanding is that there will
be three possible audits that may be conducted by different agencies on the
banking system. First, would be the auditors of the Central Bank: second
wouid be the internal auditors of the different banking institutions; and third
would be the PDlc or the Philippine Deposit Insurance corporation. so that

we foresee a possibility of only three audit examinations over a period of twelve
months per banking institution.
REP, GONZALEZ (R.). Which then... which audit report will be
acceptable to the Central Bank?
REP. LAUREL. Of course, the . ..
REP. GONZALEZ (R.). In the assumption only that there will

be some
discrepancy, for instance.
2
0{i{ iJ$
09 7I
Dacillol , 1 ij f'.161,7661f,,. r 1 ii t(l 510pm
? REP l-ALlREl,.. li,ir'. i)peaker. $ 4p{l4 54 rn fronr lloilo, the examination
conclucted by the PDIC is differerrt from ihe examination by the Cenkal
Bank...../cpd
0Ct ;:ri ,f
n97L
r'.ft
[';it\l 1
. \i:..r'
SANTOS.2 November 17, 1999 5:15 p.m.
P,O. - Dep, Speaker Abueg
REP. LAUREL. . . . liy the Central Bank. So that presumably PDIC
gives a copy of the auclit result to the Ceniral Bank ancl vice versa. And so
that tirev can cross. . .
REP. GONZALEZ (R.). Recoirciie
REP. LAUREL. . . . or reconcile, yes,
REP. GOtIZALEZ (R ) Yes, I coiisider this very critical and inrportant;
Mr. Speaker, Your Hoiror, because of wirai happened to lvlonte de Piedad. I
tfriiik what happerred ilieie is ihe farili of audit, ivii, SpeaKei.
And even iir tlre cas+r of PILTEL, ii-ris is iiot a bairk, but the point is,
tlrere was a cliscrepai'rcy in ilre auciii ieport, Mr. Speaker. 3o, sometimes, we
really neeci to irave ai1 assilrance ihat wlrei-i we k'eeir oui ntoney in a bank, what
we see, they aie tequirect to sribirrii'rheir siaierrieriis every now and then, are
accuraie. it happened also befoie, iv1i. Speakei, Youi Honor, in the case of, I
ihink, Pacific Bai-rking, where there \,vere two sets of aucjit, one was for the
union to sirow that ilrey were losiiig ancJ oire is foi tiie Central Bank to show
tlrat the bank is very much aiive. Bui ilie bottom lirie here is, that there is
deception somewhere along the line.
So, will there be a third, as you saicl, it will eventually be the FDIC audit
thai wiif be the more credible one?

@b
" oot e6
SANTOS.2 November 17, 1999 5:15 p.m,
REP. LAUREL. Mr .'Speaker, not rcatiy becarrss as I mentioned,

the
PDIC's audit would really be concentra.ted more on their concerns

about
insuring the deposits of the bank so that what they are rooking for
is a rittre bit
different from the regulatory or supervisory function of the Central
Bank.
REP. GONZALEZ (R.), But we have to tie this up, your Honor, this
question on audit and its accuracy, to evenhrall)r, the provision here on
distressed banks which wifr allow foreigners to acquire 10006. An

audit can be
manipulated to show it is distressed in order to justifo a foreign

interyention,
190o/n
And ss I think this is a matter that is very cr.iticar. we shguld maybe
strengthen this provision by itself, your Honoi ,
REP. LAUREL Yes, Mr. Speaker, Genfleman from oito. Of course in

the finar analysis, it i$ the human !:eing, because no matter
how strict the audit
is done if there are peopre who are dishonest in the organization, it

wiil take a
little time for it to be discovernct.
REP GONZAT EZ (R ) Or if there are artditors who are willing to
succumb to dictation from management As a matfer of fact, well, I will not
o .eally say this but ro some etent, in the case of pil TFt before this was vrhat
happened. The auditor in charge was rcslrained by management
from
making the reCtification thal she wanted to say in
corrnsBtion with the actUal
financial condition
Anyway, your Honor, I put that on record

as my lnput so that we may be
able to crafi something there to strengthen
that particular provision because to
4z
..e
0,!q ;iii
i
l),
i:
T
r
fuIAt IWAT , I llovenrher |7 l{r1JlJ 5:Z0p.m 1
/ (PO - [JEF(,TY.5I'FAKER ABI'E(I)
REP GONZALEZ (R ) . This is ilJso mentionetl undergection 6 {e) of
the ltw- "The bant(hlg illrl stty is hereby declare(l as indisperlsable to the national
interests. Antl notwithstandingl the provisions of any law to the conlrary, any
strike or lockbut involving banks. if unsetilecl within live working days elter
receipt
of notice by the Bangko sentrar (ng pilipinasi from the bank concemed.
shalr be
immediately ceriified by the Bangko sentral ng pilipinas to the appropriate

court.
govemment agency or commission for resolution

and reported to the president of
lhe Philippines.'
(-)f course. Your Honor, the

hierarchy of tle movement of a strike issues
wff noi go to the courts. rpso fecfo or ipso jure. they have to be. first, conciliatecl
in
lhe trepartment of Labor {and Emproyment) r wourd suppose that this

- if
unsetlled within live working ctays afier receipt of notice by ihe
Bangko $entral ng
Pilipinas from the bank concerned. the Bangko gentral ng pilipinas

shalt certifiT to
the Department of Labor and Employt]ent ail{t the Department

of Labor end
Employment wil assume jurisdiction. And if evenfualry no
setflement can be
effected there, then any pany not satisfied may qo
to.court, your Honor. I think
that shourd rre the nrovement 0f any ratror case 0f
this nature. But my point onry
rs.istherenotirnelimit.forexampre.theDclLEtosetilebecause
rhef'eworkrng
days mentioned here is onry uvith refnrence
to th Bangi(o sentrer ng pilipinas on its
obligati'n to certify irnmecriately? whal

ab'ut the tepartment of Lsbor and
" oCIr ;-1.3
I
'1.
i:
I
,i)
I i
MALIWAT -I November 17 lggs 5:Z0p.m 7
I
ii
.1
Employnent, can we not put a time limit for the Department of Labor and
Employment to settle? you know, there are cases, your Honor, wfiere the
1
i
Departn'rent of Labor and Enrproyment has assumed jurisdictlon, rike what
.l
i happened in the strike of the philippine Airlines beforo which was also ce,rtified and
considered of national interest. but was not setfled on time which

eventualty led to
the closure of the airline. I remember, one time, there was a strike at the
HongrKong and thanghai Bantt corporation here, ancl it took a long time to be
a
settled- Maybe we shourd put something here, your Honor, rf we p,t a time trame
I
I
for the Ban-0ko sentral ng pilipinas to ceftrry to the proper agency, in this
case the
Department of Labor and Employnrent, we shorrlcl place a time limit for the
Deparlnrent of Lat)or and Eiltptoyment to act and setfle the issue.
REP LAURFI yqs. Mr. Speaker. I am not a lawyer, Mr. Speaker,

Gentleman ft'on] iloilo. however, nry understandinq is, indeed, there ls a period
given of five workin(r days.
REP. GTJNZALEZ (p ) The five workino rJays is onry with refercnce to *

it says here, " x X. x any strike or lockout involvinq hanks, ff unsetfied
wfrhln foe
working days afier receipt of notice by the Banglko Sentral

ng piliplnas fom the
bank concemecr. shafi be irnmecriatery certified by the Bangko sentral ng Filipina$
to the appropriate co rt. govemment agency or conmission

for resorution." But
when wit this - in this case it is the Department of Labor and
Emproyment -
when wiil it resolve, tet us inrpose a time
rimit for that. your Honor, consrderrng th6
importance of the issue, and really the

nationar interest involved. lf lt ls admi,rted
t
' 001';i$i
-
Cejes-1 Nov 17 1999 5:25 p.nr.
I
i
I
.l
(PO-Deputy Speaker Abueg)

I
.l
jl REP. G0NZALEZ (R.). . . to the Department of Labor to setile immediatery
;j the problem, or to the court if it is the court, but we should put a time limit not
:1
',1
fl more than, let us say, fifteen days.
'4
i:
ilrl ,r
REP. LAUREI. Well, Mr. Speaker, if the Genfleman from lloilo who is a
itj
l:i
lawyer thinks that this is possible, will not contravene any other labor
ril laws, at the
i
t:1
propei'time, the Gentleman from lloilo may subrnit his amendment.
REP. GONZALEZ (R.). yes, your Honor. And if it does not contravone
any existing law, will the distinguished sponsor accept it as an amendmeno
REP. LAUREL. Mr. Speaker, at this point I have no objections to

amendlng this particular section and incorporating the idea of the Gentleman
from lloilo.
REP. GONZALEZ (R.). In Section 20, your Honor, Bank Management,
does this mean that the Monetary Board has veto powor as to the choice of
directors of the Bank? Because it will pass upon the qualifications and
disqualifications of individuals to hold other positions in the Bank. lt says, ,,The
Monetary Board may prescribe, pass upon and review the quarifications
and
disqualifications of individuals rvho are elected or appoinbd bank directors or
officers and disquarifu those forrncf unfit so, the thinq here is, has the central
Bank really a set guiderine as to what wourd
be the minimum quarifications for a
person to be a member of the Board?
Because then it says, ,,The Monetary Board
00t 3"r
l\
[r, ,1
i'i
Cejes-1 Nov.17,1999 5:25 p.m.
may also pass upon the qualifications and disquaiifications of individuals. ,,ln
etc.
determining whether an individuar is flt and proper to hord the position

of director,
etc., regard shall be given to his integrity, experience, education and training,
competence and soundness of judgment for furfilring the responsibilities
appurienant to the position." Maybe his track record wouid have to be taken
into
consideration.
REP. LAUREL. yes, Mr. Speaker, the Genileman is correct.

The problem
in the banking industry, in the beginning it was sufficient for a group to appry for
a license to operate, say, a c.rmmercial bank, and upon approval, the Central
Bank no longer looks at the fit and proper qualifications of the

directors, officers
and managers, so that throrrqh the years ihe quality of the people in the banking
institution may deteriorate. so, they decided to improve this particular

section so
they may contlnuously procAed
REP. GONZALEZ (R ). \'es, Yorrr Honor. I aoree with this. In fact, this is a
good protection if it can be imf'lqrnenipcr. The point, however

is, normally, who
will sit in the Board? The major stockhoiders. First and foremost.
REP. LAUREL. yes, that is correct, Mr, Speaker.
REP. GONZALEZ (R.) The major stockhotders, the major investors. In
fact, I think it used to be, I do not know if it is stiil happening

now, it used to be that
to become a director of a bank you must own at least, or

they say you buy p50
rnillion worth of investment in the bank and you
can become a director. The
point, however is, I don't think that we
can at the start impo$e a condition there,
unless from the time a group of persons who
organr\nto a bank and flre therr
'- Afit g2'
i
l.
2
I
:
Cejes-1 fJcv lT, j999 5,25 p rn.
constitution and ,y-la,,trs, etc, yor,i c;an

alr.;rqiy iell them, ,,iyan hindi
pUwede
ryan.,."/mvc
r'' odll 3o
,, \t'
ll
LEDESMA.2 I'lovember 17, 1999 S:S0 p.m.
page 51 of the bill, of the matrix? | just ask this because \4/e approved the HIGC
bill already. I hope itdoes not..,tey

t[ \
.)N
\
{trfit 41;
Ii
REGODON - 1 November 17, 199g
PO _ (THE SPEAKER)
REP. GONZALEZ (R.). . . . ,van hindi pwede'yan, kasi ganoon lang

!an,,,
But here comes a person, he may have an unsavory character, perhaps, or
whatever. He may have been somebody known for his sly operations or his
activities which are not savory but because he has a lot of investment, he
sits in
the board. He may evn be the chlef operaflng otftcer. I don.t thlnk we can
have a
veto power on that at that poiilt bLrt I cio not know later on. can the bank realty
disqualify? Do you think the bank can iegally justify? "Oh, by our standards, you
do not meel the requirements and you should qet out as a director." Horfl do you
soive this, tour i.ionor?
REP. LAUREL. Mr. 'speaker, Genfleman fronr iloiro, there is an existing
circular covering the qualifications of directors, officers and managerc of banking
institutions, so that this is beinq followed, Mr. Speakor.
' For instiance, if a rich person invests in a bank, in the beginning he
submits a name of a person who is quarified and subsequenfly he makes.the
person resign and he gets himserf elected. rf for instance, just

as an exampre, Mr.
speaker, Gentleman from iloiro, he was invoived in another

banking institution that
folded up. so, when the name is submitted, which

is a requirement by the cenhal
Bank, and they find his name and they can review,
and if there is something
wrong, the centrar Bank cails the attention
of the financiar institution to say ilrat
Mr. So and So is not gualified. This
is.how it operates.
REP. GONZALEZ (R.). So, that is the what I call the ,Veto.powef
of the
bank. ,1V
0lll J<i
REGODON-1 Novemtler 17 '1!l9g
a 5:30 p.m.
REp. LAUREL. Vllelt, this is on the fft and proper

section that we, . .
REP. GONZALEZ (R ) By your experience anc, from the records, your
Honor, this has never hpen eorrtcstpcl.
REP. LAUREL. rthink many times, Mr. speaker, Genfleman hom

iloiro,
even small rural banks Because in ihe beginning, when the rural banking system
was organized, it is not reaily ihe bankers who are organizing the difierent
towns,
especiaily the smail towns, and sometimes those who are moneyed
may not have
a
the proper education. So that, maybe they are just higrh school graduateq
so
central Bank calrs their aftention. of course, the rnvesror can overcome this
particular requirement if he can show that he is a product

of experience and hard
o knocks and therefore he can convlnce the centrar Bank, "r am quarified".
REP. GoNzALEz (R'). so, the matter of educationar quarification is not
really a setback to sit in the board.
REP. LAUREL. Not all the time, Mr. Speaker, Gentleman from lloilo. In
fact, if the investor can prove that he has been.in business

for many, many years,
even if he did not have a coilege education, sometimes

the centrat Bank makes
an exception.
REP. GONZALEZ (R.). And the Central Bank, do you think, accept a
person who has not finished erementary grades
but has become a very successful
businessman and has prenty of money to
invest in a bank and become a director?
REP: LAUREL. perhaps, depending on circumstances, Mr. Speaker,

Gentieman from iioilo. q^/
Q0r sti
a
/\
VIVERO-1 November 17,1999 5:35 p.m.
(PO - DEPUTYSPEAKER ABUEG)
REP. LAUREL. ...That is correct, Mr. Speaker.
REP. GONZALEZ (R.). Now, we were tatking last night about the
grandfather rule. We do not have the grandfather rule, but is there a citizenship
rule on, or control test on secr"rring, for example, voting trust agreements or
proxies? | am asking this because of the citizenship requiremenb as a general
rule. Now, a foreigner may only own 40of of the voting shares but he may control
a bank by securing votino trr"t.;ts for, let us say, five years from minority
stockholders. How do you solve that problem, Your Horror?
REP. LAUREL. Mr. Speaker, I am not sure if this is allowed or not, whether
using the voting trust agreement will violate the law concerning ownsrship of
banking institutions.
REP. GONZALEZ (R.). No, butwe are talking hereof control. lthink... but
.
we are concerned about the control of the bank.
REP. LAUREL. Yes, precisely.
REP, GONZALEZ (R.) A situation here is a minority can control the bank
by voting trusts. Even in the case of San Miguel before; the Sorianos only owns a
very minuscule percenbge of the stock but they had all the voting trust
agreements and proxies eveffiere. so they have been in control of san Miguel
for a long, long time. Can this not happen in a bank, your Honor?
REP. LAUREL. Mr. Speaker, I am not certain but my common sense tells
me if we are not arrowed to give contror to foreigners under the raw

as lar as fo
fi.flr 't';!
vtr/ERo 1 ljovrmber 17, 1999 5:35 p.m.
banking institutions ard concerncd, .,^rhether thcy can qo around the lav,, and
conhol the institution by getting voting trust agroemonts.
REP. GONZI,LEZ (R.). Then if that is the case, your Honor, we should
place a prcvision here that voting trusts cannot be allowed in cases of citizenship
of banks or control over the banks, Your Honcr.
REP. LAUREL. ltJr. Speaker, at this point. ..
REP. GONZALEZ (R.). Vis-a-vis foreigners. I do not mind if a Filipino gets
voting trusts, but foreigners...
REP. LqUREL. i,rlr. Speaker, I would like to shte hers that at the proper
time the Gentleman from lloilo may submit his amendment, and I am willing to
accept the amendment.
REP. GONZALEZ (R.). Now, in Section 14, about no limit to the number of
corporations holding shares in any single bank. ls this not a situation where you
will eventually allow one group - a corporation - with interlocking stockhotders
and so forth? The sams group interlocking? They are controlling these difierent
corporations with difrerent juridical personalities? But it is rcally one, just like this
morning in the papers; we read about the AMA group of companies.
REP. LAUREL. Mr. Speaker, the interlocking directorate rule does not
allow a director from one financial institution to sit in another

financial institution's
board of the same crassification; this is the prohibition. precisery,
as pointed out
by the Gentleman from lloilo, to safeguard against
the exercise by the same V
. flt 31i
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VIVERO - 1 " November 17, 1g9g 5:35 p.m.
person 0r group of persons undue influence over the policy-making or
managcrnent functions of the financial institutions.
REP. coNzF'LEz (R.) In section 38, the acquisition of voting stocks in
distressed banks, my first question here is: when is a bank distressed which will
then cpen it to fcreign investments up to 100%? will a situation where a bank
which has assets but has no llquidity be ccnsidered Cistressed?
REP. LAUREL. Irilr. speaker, my understancing cf distressed institutions
is, first: lf it is unable tc answer. ..
REP. GONZALEZ (R.). Withdrawats,., /acv
00r r3
{ti
DOMINGO j z Nov, 17. ltlcxr 5:40P,M.
(P.O - DEPUWSPEAKI:R ABUEG)
REP. GONZALEZ (R.).,.,Withdrawats
REP. LAUREL. .,.to answer its commitments or obligations. Like, if there
is a withdrawal and they cannot...
REP. GONZALEZ (R.). Yeah, precisely, here is a bank that has plenty of
assets but because of panic withdrawals, somobody spreads the rumor, etc., there
is a panic withdrawal, this bank runs out of funds and the central Bank will not
anymore give additional support. or the central Bank does not like the face of the
President there and cuts the - like what happened before to Banco Filipino, they
just cut the support bscause they wanted Banco Filipino to go. Now, if that is the
situation but it has assets, will that be distressed? Because under our law on
bankruptcy or insolvency we have a situation of suspension of payments where
the corporation has plenty of assets but it has no cash, it does not have liquidity
at a given time to meet iis maturing obligation. So, will that already be considered
dlstressed or do we put a cartain period of time when the bank

- you know -
because what will happen to the bank when it cannot meet withdrawals, it will
declare a bank holiday. \A/ill the central Bank consider that per se by that alone
that this is now a distressed bank, isasara na natin ito?
REP LAUREL. I think, Mr. Speaker, if the assets are not sufiicient to
ansvrer for the liabitities that wor"rld be the situation fhat central Bank forEsees.
Although, under the rures of the cenhar Bank, iiliquidity

as mentioned by the
Gentleman from rroiro, insorvency, ancr the non-capacity
to pay obrigations over a
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00r.46 f,
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:5 DoMlNGo{,} Nov. 17, 199" 5:40P.M.
i1r
a certain period and in the meantime, the central Bank provides funding assistance
1
.1
until it reaches a point where Cenkal Bank believes...
tl
REP. GONZALEZ (R.). Hindi na puwede.
'i
a REP. LAUREL. No matter how much assistancs will bE...
REP. GONZALEZ (R.). That is the point I am driving at. That at a given
. time when a bank for certain circumstances cannot meet the withdrawal demands
or meet its obligations but it has assets, it may not have.to be declaied distressed
immediately, it should be given an opportunity to recover at a cerbin period of

:
a
time, lthink. Rather than ipso facto declaring it distressed and then it will now
become free to foreign capital who would want to take over the bank 100%
l
this
time because that is the' thing that I am a litfle bit.unhappy about, this 1000,6
incentive to foreign capit;rl because the banl< is ,,distressed,,, I think yre should give
it a chance. Also, ldon't know if I heard it correcily last night when yorr Honor,
was discussinq with th' Genfleman from Misamis oriental when you told the
Gentleman from Misamis oriental that no Filipino is competent to acquire a
distressed bank. ls that correct. Your Honor?
REP. LAUREL. I beg your pardon, Genileman from lloilo.

j
.1.
REP. GONZALEZ (R.). Did I hear you right, your Honor, of having told
the
I
l Gentleman from Misamis orientar that no Firipino is competent or quarified.,./mvd
'\L
c'
\\\r
0{'}r 4:i
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Mlluna
i'l November 17. 1999 5:45 p.m.
(P.O. - Deputy Speaker A,bueg)
REP GONZALEZ (R ) no Filipino is comprltent or qualified to acquire a
distressed bank?
REP. I_AUREL Yes, Mr Speaker, I mentioned last night, during the
deliberations of this hill, that if there aro no qtralified Filipino investors, that is one
I
l of the condition's; second, that the bank is distressed and local capital is no longer
i available or local capital is inadequate then, only then will central Bank allow a
;
foreign investor to come in temporarily.
REP. GONZALEZ (R ) That is what I rvant to hear, your Honor, not a
statement that no Filipino is competent or qualified to acquire a distressed bank.
ln other words, what I want to hear is that even if there is a distressed bank , the
first crack, the first or the preemptive right to acquire it should be given to a
Filipino or to a Filipino group. only when there are no Firipinos quarified or wilring
to take that risk should then open this bank to foreign intervention, your Honor. ls
that a correct understanding here now?
REP. LAUREL That is correct, Genfleman from lloilo, Mr. Speaker.
REP. GONZALEZ (R.). Then in that case, we agree with each other.
Here' in seciion 43 which says: "The Monetary Board, by the afiirmative
vcte of at least five may revoke the license to transact business in the philippines
of any foreign bank not formed, organized or existing under the taws
of the
Philippines, if the said Board finds that the foreign bank is
insolvent or in imminent
danger thereof or that its continuance in business wilr
invorve probabre ross to
Mlluna
a, November 17, 1999 5:45 p,m.
.
a those kansacting business with it." What would be the circumstance here? What
'1 would be the evidence?

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REP. LAUREL. Well this; Mr. Speaker - Gentleman from lloilo, is included
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in the General Banking Act to protect the creditors, the Filipino credltors dealing
I
with the foreign bank.

/
I REP. GONZALEZ tR.). Yes, but the point is how do you deterinine that
i
I
this foreign bank is now in imminent danger of insolvency?
REP LAUREL. Mr. Speaker - Genileman from lloilo, of course, the Cenkal
i
t
Bank monitors almost on a dayto-day basis the banking institutions. They are
submitting reports, including audit roports, and this is analyzed by central Bank.
And if there are signs that it is leading towards trouble, then they start sending
o audit teams to stay in the bank and they dig deeper and then it will get to a point
where they will realize that this bank is in kouble and, therefore, it will. ...
REP. GONZALEZ (R ). I hope this wiil be done very strictly, your Honor,
because the bank involved here is a bank that has not been organized in the
Philippines so with more reason that v,re should be vigilant in seeing to it that
those who transact with this foreign bank ar" properly and consistenfly protected
Your Honor,
Now, in Section d 1 , who declares the agent or the head of a bank, for
purposes of summons or legal process, as mentally incompetant?
..../m(
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2 iX0t 4i;
LEDESMA.2 Novetnber 17, 1999
REP. GONZALEZ (R,). ...incompetent.
REP. LAUREL- I'm sorry, Mr. Speaker, the Genfleman is asking who?
REP. GONZALEZ (R.). Under Section ,,Summons

41 , it says, and legal
process served upon the Philippine agent or head of any foreign

bank designated
to accept service thereof shall give jurisdiction to the courts over such bank. and
service of notices on such agent or head shall be as binding upon the bank which
he represents as if made upon the bank itself.
Should the authority of such aqent or head to accept service of summons
and legal processs for the hank or notice to it be revoked, or should such agent
or head become mentally inconrpetent x x x."
Revocation of the authority may be easy but to prove the menlal
incompetence, I think you will need the declaration here by a doc'tor, medical
experts.
REP. LAUREL. Yes, the cenileman is correct, Mr. Speaker. presumably,
there must be a system of determining whether a person is competent or not.
l REP. GONZALEZ (R.). Then you should add something here, your Honor.
I Incompetenl as dclard by medical authority or something. Because the sherif
might just tell you, 'that fertow is mentally incompetenf'. Then we

will not be able
to acquire jurisdiction'anyrnore, "Thafs just an input, your Honor,
but that,s also
important because of fie'jurisdiotional rquirmnb
on service of.summons.
REP. LAUREL. At the proper time, Mr. Speaker, Genfleman

from lloilo. we
will be willing to accept the suggested amendmen\_fl
0flt 44
f'r
LEDESMA .2 Novemher 17, 1999 5:50 p.m.
REP GONZALEZ (R). In Section 42,yorr l-lonor, would you agree to
delete the phrase "ln all maftcrs not specifically coverecl by special provisions
applicable only to a foreign bank or its branches and other ofrices in the
Philippines". Can we just delete that phrase and start Section 42 by ,ANy
FOREIGN BANK LICENSED TO DO BUSINESS IN THE PHILIPPINES SHALL
BE BOUND BY ALL LAWS, RULES AND REGULATTONS" etc.? | think this witl
have a stronger efrect.
REP. LAUREL. At this point, Mr. Speaker, Genfleman from lloilo, this
a
Representation is not yet prepared to accode to the suggestion. perhaps at the
proper time, the amendment can be submitted. In the meantime, I'm able to
research on the ramifications of removing the first sentence. i
REP. GONZALEZ (R), Weil, the most important thing here is that these
banks licensed to do busin6ss in the Philippines shall be bound by our laws. That
is the most important aspct.
REP, LAUREL. Perhaps, Mr. Speaker But as I said allor this
Representation to...
REP. GONZALEZ (R.). Okay, your Honor, I wiil agree. But I want tfiat
inputted in the proposed amendment, your Honor.
A few more points on the - incidentally, your Honor, in ths final provisions
in chapter X, there is a carryover here about Bangko sentrar shail phase

out and
kansfer its supervising regulatory powers over buirding and loan associations
to
the Home lnsurance and Guarantee corporation, rs this a carry-over provlsion

or
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Afrt,4t,
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,i C,lAaullar - 2 November 17, lg9g 5:55 p.n,

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ilI (PO - Deiruty Speaker Abues)
sft
.RFp- CONZOt.ot .,*- 'r r I hope lt doee not conf llct with
anythlng that we have there.
.i REF. LAUREL. Mr. Speaker, Gentleman frour IIo11o, lhie
..j
ti 1a really a phase-out; In the neantlme, they wlll contlnue

+^ ovePaee,
REP. (R,). Yee, but when we approved the HIGC

GONZALEZ
bi11, do you thlnk thle ls already wlthln the purvlew of

that approved b1I l?
let ue croaE that brldge later on. May I
Wel"I, anyway,
aek you, Youf Honor, 1f from your experiEnce or from your
lnformatlon, have there ever been dlrectore of a banh who
abused the DOSRI prlvllegee
hailed to court?
who have been
REP. LAUREL. Mr- Speaker, Gentleman frorn I1o1l-o, I
thlnk there are court caees filed.
REP. GONZALEZ (R.). Becauee unrler Sectlon g3 of the
otrd law here, the office of the d{r,ector or offlcer of a
I
bank who vlolatea the pr.rvlElon c.tf th ie Eeetlon ehall
lmmedlateLy becone vacant and the director or offlcer ehall
be punlehed by lmpr.leonnent of t lees than one year nor ne__,
nore than ten year6 ancl a flne of not leee than p1

"0O0 nor
more than PlO,000.
Thle Ie a provlslon that I wonder lf it haE ever been
u6ed to run a.galnet a.buelve offlcer of the bank
wbo have
abueed theee DOSRI prlvlleges that they have.
L1ke,
"*n/"
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il t r]lt.g1lJ.Iar - Novenber 17, L9gg 5:55 p.m.
il
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take the caee of Orient Bank, I don't thlnk any of the
i bosses were ever hailed to court.
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REP. LAUREL. Mr. Speaker, Gentleman from f loI.Lo, aB
I far. ae Orlent Banl< lB concerned. we 6re lnforned by the
I
Ceniral. Bank that Froper .ceeeB have been flled ln court.
(R.). Crlmlnal casea. your Honor? What
R.EP. GONZALEZ
I want to eee is ihere are crlmlnal ear;e-q itled because to
ne, abuee of thls DOSRI whtch caueed the cfoeure of a benk
and therefctte cauaecl . lot, of Rac:rIf jcee. and loseea to
lnnocent lnveetors. in,rr:eent rlepoaitorc. should really be
punlshed. 'Ika nga, ea.botage na iyan ?: . Unl-es6 we can glve'
teeth to thlE provlsl.on.
You know, I ashed bhlg trecauee I was readlng an artlcle
ln today'e lesue of Buslness WorJd by Dean dela Paz. It
edye, '-The blgger they are'"-he le taiklne he.r\e, Yoqr
Honr-rr, of ... I wonder, Your Honor, I f 1,,-.11 have read , had a
l
l
chance to read th16 ertlcle. But lt epeake trbout the merger
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I of banke. And the bot,tom Llne of hl ertlcle 18, we11, you
merge the bank, the blgger they are, the blgger DOSRI that
w111 reeult.
And 1t nergerlB nay yat, Eave the
economy and authorltles fron havlng to
reBcue banks That 1a the advantage of
.ELze. But 1t to eee eome croohed DOEBI ,at
leaet taken to there lleg the weakneeeee of
the lnduetry. but ao doeg Ju6tlce. Wlthout
Pase Z
6t)
c,lAsutlar -,
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Page 3
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I An$ula -2 Nov. 17, 1999 0i00 p,m.

.
I
go - 0EPUTY SPEAKER ABUEG)
REF. GONZALEZ (R.). .,,|n ebuses 0f DOSRI, 6tth0ugh lhere afe no

.]
limitalions menllonod hgrs should bs snlargod nol imagined. Before, your

Honor,
lhe fine ia Pl,000 nor p10,000 but they had aquanderod miilions of peeos of the
inn0c6nl dspoEilors' funda, p10,000 fing? My Gad, thal is a pillancel I

I thinx,
l
Your Honor, I would suggest rhar ws shourd increape pen"tty insofar ae DosRt
!
violalions aro conc6rned,
a
ll REP. LAUREL. Mr. speaker, Gsnileman from lloilo, on the firsr qu"rtion
I on criminal charges, for lhe informalion of the cen 6man from Itoilo, ths craminal
chargs ar' now b'ing r'adied by Bangko $enrrar agarnst Mr. G0 0F ori0nr
O Bank. Now, on lhe maller of flnes and
REP. cONZALEZ (R.). Welt, thaf is for lhe court lo dstermino. But af
long as lhr law tays lhe fino i+ only p10,000,lha courl cannot anlarge on lhal.
REP. LAUREL Mr. Snraker, Genlleman from lloilo, regarding finos, lhie
ie
addrassed byths Central BankAct. There is an increase irr fines,
REP GONZALEZ (R.1. yas. Ths Genarar Banking.Acr we are talking
ab'ur herg in 337 speaks of tha fine 0f p1,000 to p10,000. Thar is

why I want
ihat 6nhanced in our bill.
REP. LAUREL. ls thts dailv
FiEP. GOMALEZ (R.). your Honor?
REp. LAUREL. ..,Mr. Speaker, Genlleman from

llollo, ihe P1,000 to
P10,000 is a dailyfine?
00t s0
f'r
Ansula -2 Nov. 17, lggg 6:00 p.m.
REP. G0MALEZ (R ). I says here: ',The offlce of the dkeclor or onicer
of a bank who v{olaleg the prDvlslons ot lhls secilor,. raterrlng to secllon g3

- -
"shall lmmedlately become vacanl" In olher words, he wllt be flred as dlreclor
-
"and lhe dkeclor or olllcer shall be punlsherl hv
- lmDrlsonmenl of nol less lhgn
ons y6ar nor mor8 rhan r.n yoar$ and a fino or not rs$$ than p1,000 nor m0r0
then P10,000 ,' lt ls.not one dav.
REP. LAUREL. ls the Gen emari referrlng to the
REP, GONZALEZ (R,), SEction E3 0f RA t37,
REP. LAUREL. 83.
REP. GOMALEZ (R.). yas, your Honor. This is reafly, I think, refarring
l0 lhe DosRt'r. "No dtreclor .or offlcer of any banklng Insllluillon shall elther
directly or indhectD for him*elf or as a rprssntalive or agenl or othere borrow in
arry of th6 dsposlts of funds of such banks nor shall h6 bscomE s guarantor/
endoner, elc. ".
REP. LAUREI. Mr. speakar, I think tha Gsnilaman from iloiro ir rfcrrrng
to lhe old law because In lhe

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REP. GOiIZALEZ (R.i. yee, I am referring lo the old law.
was a8king you arlisr whgther you have rocords ot how
That ls why t
marry had ben sanl l0

jail, h'w many had bssn charg.d,criminally,
slc.. But the polnt is, ws haw ths
same, similar proviEion hera in $ection 69 which
sp'aks of tho psnar provisions oF
$ecrions 36 and 37 0r RA 7653. But the point
is, in this bit that we have I want
lh6 penalty denned in a more soflous mannsr, your
Honor.
Ofii 5.;
futsula -2 Nov. 17, 1999 6:00 pm.
REP. LAUREL. Yes, Mr. Speaker, I undersland lhe poinl of lha

Gsntleman rom ll0[0. perhaps ths moro perthent sscilon nguld be $ocilon 89
''
ryhich cowrE lh6 prnaltiss for violalion8 0f lhB acl and lhis ls covarcd by lhr
]11
csntral Bank Acl. In the now c0ntrat BanK Act, lhat i3 soclions 34, 35, 36 and
1
'j 37. Thore har baen an incrraaain penallies, Mr. $peakor, conileman from fioilo.
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t REP. cOMA|EZ,(R.): That is {elry it spEaks of 2653, atthough Soction g9
I
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speaks genarally while the DosRl mattors. in $aclion g3 is mor8 rpeciflc. Bul
t enyv{ay, Your Honor, we can fine tuns lhis and slyle properff perhapr
l
0n that nole, Mr. Speakar, your Huor, I havc n0 furlher querliona. I will
Just wall for the perlod of amendmenls l0 Inlroduce s0me amendmenls. . ../ala
o
4fir Sft N
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Bongulto.2 NoVEIAEn t?,1999 6105 p.m
REP. cOtlZAtEZ (R.). ...10 inlroduce some amondmenls.
Thank you very much, Mr. $peak6r. Thbnk you rery much, Mr. Sponsor.
REP. LAUREL. Thank you, Genfleman fiom ltoito, it is I ptaasure.
THE DEPUTY SPEAKER (Rep. Abueg). The Malodty Ftoor Leader.
REP. TEODORO. Mr. Spaaker, I aslr for one_mlnufe suspsnslon.
THE DEPUTY SPEAKER (Rsp. Abu6g). Session is suspended.

I
ftw's 6:05 p.n.
:
At 6:05 p.n., fie ses.crb, was re.qumed.
THE DEPUTY SPEMER (Rep. Abueg). The session is resumed.
Whal ls the pleaeure of the Genlleman from the perty-llst Cooperallve?
REP. PAEZ. Mr. Speaker, lhis Represenlali'n wruld tike to raige some
quesllons to lhe Genileman, the chairman 0f the commlttee 0n Banks and
Financial Inlsrmediarles.
THE DEPUTY SPEAT(ER (Rep. Abueg). tf the Sponeor ts wiillng to rspty,

,.
o REP. LAUREL. Wllthgly, Mr. Speaker, to the cenfleman repreacnilng
lhe
Cooperallrre.
THE DEpUry SPEAKER (Rep. Abueg). The Genlleman from Gooperalhru
may proceed.
REP. PAEZ. Mr. Speaker, your Honor, this

Ropre$snlailon le very much
Inleresled In thl$ proposed mea$ure on lhe general
banklng operaflonr becewa
n/
. ,,/\y
00r sii
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Bongulto -? NOVEIVIBER 17, 999 6105 p.In
wllhln the cooporallve sector we have the so-called cooperative banks, not only
cooperalive banke, we have also credil cooperatives. And thie Reprerentalion
would Jusl like lo be clarlfled whether lhese flnancial imfltuflons wllhln the
cooperalfve sector which is, in fact, regulaled by a separale law, thal ie a
cooperatlve law, R8publlc Act 6938; lhat ls the Cooperattve Code of the
Phlllppines will b aleo under the bupeM$on of the Central Bank.
Mr. Speaker, Your Honor, may I know from lhe Chalr of the Commlfiee lf
iiI
cooperalirae banks and credil cooperativee are also under lhe supeMsion and
I
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16gulatlon of lhe Central Bank?
I
REP. LAUREL. Mr. Speaker, Genileman from lhe Cooporalive, lhe
angwer 19 ye$.
REP. PAEZ. Insofar as coopBrafive bank ls concerned, what about credlt
c0operaltve$ whlch are nnancial lmfituttons also?
REP. LAUREL. Mr, Speaker, lhe Genlleman from the Cooperalirre, if
licensed under lhe cenlral Bank, they wilt be covered, but if lhey are under the
cooperaltues, lhey haue difierent law, I undersland. lhal covers lhem.
REP. PAEZ. Mr. Speaker, precisely, I raleed that polnt becauee 0n page
2, llneg 5,6, 7 whlch talks ab0rJt quasi-bank3 and llne 7 talks ebout quarFbanklng
funcllons. Thls Representallon woulrf llke to ask and lo be clarffled when doee
Genltal Bank consider a financial inslilulion angagerl in quasi_banking?

How dO
we know lhat such llnanclal Inetilrrflon ls performlng quasi_banking? If

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BRACIA'f ;. November 17, 'tE*- 5*Op.m.
:
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) (PO-Deputy Spoaker Abues)

:
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REP. PAEZ. .. Republic Ac,t No. 8838, whlch have borund funds hr
I
relendlng purpo3cs and meny of our credit eooperauves ar|' radflent of lorns,
! provided by govemment financial institutions, and this rnoney i6 rclant to thair

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members? so, [under thls definition] will this crdit cooperdve be consldsred
as prac{idng quasi-banking under this definition?
l
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REP. IAUREL. Mr. Speaker, cen{aman ffom ths Cwpsr*ves, tte
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Gentleman will recall that he attended one of the meetings purpasdy ce[ed to
a
.:: anstyEr tftis partlanlar issue and the central Bank urotr a nrcmorandum
:i
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explalning to the Gentleman which we provlded the Gcnucrnan e copy of thls.
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Does ttn Genflemrn havc trls par{culer communicatim?
10
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REP. PAEZ. This Rcpreentation doccnt harre thc copy ot tH
".4
H rnemorandumlrcurd*,by the Gerrtlrl Bank, lf trgt b ddruord to thk

t*
ti
Rrprumhtonpldontlunlany ofidrl communicafion from thc Gartral Bank
H
!:
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with regard to thls issue on quasLbanking that ls efiqcthg fu credh
1
:7
H
coopqratlvs.
i{J
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srJsPEMitoN oF 8ESs|Oil
ii
a REP. I UREL. Mr. Spreksr, may I nk for tnrc m[u.b ruprnrbn of thc
,l o
:l sesolon?
:,]
THE DEPUW SPEAKER (Rep. AbueS). Soa*n b srrprded.
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It was 6:11 p.m.
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CABANOS.2 November 17, 1999 6:15 p.m.
This Representation would like to ask the Chair of the Committee to make
comments on this.
REP. LAUREL. Mr. Speaker, niay I reguest the Genfleman to repeat the
question?
REP. PAEZ. While Section 65, on "Minimum Capital", provides that the
Monetary Board shall determine the minimum capital requirement for each
category of bank - the assumption here is that, this includes cooperative bank.
REP. LAUREL. Yes, Mr. Speaker, that's correct. However, in case of a
conflict between this particular section of this particular law and the cooperatives
law, the cooperatives law has jrrrisdiction.
REP. PAEZ. So, in other words, Article 106 of the Cooperative Code of
the Philippines, Republic Act 6938 applies when it comes to minimum capital
requirement for cooperative banks. ls that correct?

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REP. PAEZ. On page 21, line - starting line 2 up to the following page,
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extended by a cooperative bank to its cooperative shareholders," ln other wordg,
I:l this is a provision that is exempting cooperative bank with reference to the DosRl
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t)acillo2 .17
l.iovernher 11lir9 6:20 p.m.
(P0 - Deputy Speakei Abueg)6
REP PAEZ .. lr; that correct?
REP LAUREL That is conect. IVlr Speaker.
REP. PAEZ. This Representation vyould like to be clarified, what do
we mean by "cooperative shareholders"?
REP. LAUREL. Under what section, Mr Speaker, is the Genileman
referring to?
REP. PAEZ That's page 22, line 1, but this is a continuation of page
21, starting line 2, with regard to the limit on loans, credit accommodations,
and guarantees as prescribed.
REP. LAUREL. Page22, Mr. Speaker?
REP. PAEZ. Yes, page Z2,line 1. What do we mean by ,,cooperative
shareholders"?
REP. LAUREL. Mr. Speaker, the limit under this section shall not apply
to loans, credit accommodations and guarantees extended by a cooperative
bank to each cooperative shareholder. That is what it means, Mr. Speaker.
REP. PAEZ. Precisely the question is, what is the definition of

"cooperative shareholders". Because cooperative banks are o\,yned by
cooperatives. so, in this case, cooperatives are stockholders of the bank.
Now, if you say "cooperative shareholders", it could mean also that these are
the shareholders of cooperatives. Meaning, yoLr have a cooperative, a savings
and credit cooperative, which has s,000 members; these 5,000

members are
shareholders or stockhorders of this cooperative. Hovrever, this

cooperative, by
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17 l{oyember 1 999 6:20 p.m.
virtue of its participation, because this cooperative contributed equity, then
therefore it becomes an owner of the bank. In other words, the cooperative
. becomes stockholder. so the clarification is that cooperative shareholders
would mean cooperatives which are stockholders of the cooperative bank. ls
that what we mean by cooperative shareholders? In other words, cooperative
which is a member of a cooperative bank will not be governed by the DOSRI
restrictions, under this definition?
REP. LAUREL. The shareholder of the cooperative bank. ..
REP. PAEZ. Yes.
REP. LAUREL. . .. are not covered by the limiiation?
REP. PAEZ. Yes.
REP. LAUREL. I agree with that , Mr. Speaker.
REP PAEZ. \A/ell, with that explanation, this Representation is
satisfied. Because I think this is very important for the record. so that when it
comes to interpretation whether cooperatives who ars members or owners of
cooperative banks borrowing money of those banks should not be covEred
rrnder the DosRl regLllations. lf that is so, il-ren this Representation is very
happy about this amendment, This Representation

',vould like to make it clear
that whether it is important that an amendment can be introduced to this
particular section. That is by defining what we mean by,cooperative {
shareholders". .P
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REP. LAUREL. At the proper time, Mr. Speaker.
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Dacillo2 17 November 1999 6:20 p.m
. , REP. PAEZ Okay thank you very muih, [4r. $peaker.. Thank you very
much, Yolir Honor i6pfl
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SANTOS-3 vernherlT lq9Fl 6:25 p.m,
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P,0. - Dep, Speaker Abueg
I jusi like to ilake a suggestion to ihe author, Mr.
SUSPEI'lSl0l'l OF SESSION
REP. ALBAI.IO. ir4i. Speaker, ,r,u, t uat for a one-minute
suspension?
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SANTOS.3 November 17, 1999
THE DEPUTYSPEAKER (Rep. Abueg). The session is suspended.
Itwas 6:26 p.m.
The
SUSPENSION OF CONSIDERATION OF H.B, NO.6814
REP. GONZALES (N ) While waiting for the other Members who have
manitested their intention to interpetlate the dlstinguished Sponsor, may I move
that we suspend in the meantime the nonsidoration of Gommittee Report No
276 on House Bill No 6814.
I so move, Mr Speakor,
THE DEPUTY SPEAKER (Rep. Abueg) Any objection? (sitence)
The Chair hears none; the motion is approvecl
REP GONZALES (N ). Mr. Speaker,
THE DEPUry SPEAKER (Rep. Abueg), The Majority Floor Leader.
REP. GONZALES (N.). Mr. Speaker, with the unanimous consent of
the House, I move that we take uD some local bills.
THE DEPUTY SPEAKER (Rep. Abueg) Any objection? {silerne)
With the consent of the House, we will now proceed to take up local
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00 sii
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Cejes-2 Nov.22,1999 5:35 p.m.
THE DEPUTY SPEAKER (Rep Guilas). ls there any objection to the
motion? (Silence) The Chair hears none; the motion is approved.
REP. ROSALES. Thank vou.
REP. ROXAS. Mr. Speaker, we have exceeded the one hour allotted for
the Privilege Hour. Accordinaly, may I move that we now terminate the said hour.
I so move, Mr. Speaker
THE DEPUTY SPEAKER (Rep. Guilas) ts rhere any objection to the
motion to terminate the Privilege Hour? (Sr/ence) The Chair hears none; the
moflon ts approved.
CONSIDERATION OF H,B. NO.6814

(Continuation)
REP. RO)(AS. Mr. $peaker, may I move that we now continue our
consideration of the Unfinished Business by resuming our deliberations on
Second Reading of Commitee,Repori No. 206 on House Bill No. 6814 submitted
by the Committee on,Banks;afid*Financial Intermediaries. For this purp!s6, may I
ask that the Secretary General be directed to read the tiile of the measur6.
o
THE DEPUTY SPEAKER (Rep. Guilas). ts rhere any objection to the
motion? (silence) The Ghair hears none; the secretary General is directed to
read only the title of House Biil No. 6g14 contained in committee
Report No. 206.
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RECODON - 2 Novsmbei 2?, 1999 5:40p,m,
PO - (DEP. SpEAKER GULLAS)
REP. ROXAS. . . . on this measure and may I ask that we recognize the
distinguished chairman of the committee, the Honorable Macario Laurel lV, so he
may resume hls sponsorship of the measure
THE DEPUry SPEAKER (Rep. Gullas). ls there no objec{ion to the
motion? (Slence) The Chair hears none; motion is approved.
The Chair recognizes our distinguished colleague, he Honorable
chairperson of the committee on Banks and Financial Intermediaries, the
Honorable Macario Laurel lV, io resume his sponsorship.
REP. LAUREL. Thankyou, Mr. Speaker.
o SUSPENSION OF SESSiON
REP. ROXAS. Thankyou, Mr. Speaker
Mr. Speaker, the Gentleman next scheduled to interpellate is the .
distinguished Minority Leader. May I ask for a few minutes suspension. I
understand that he is en route to the session hafl. lso move, Mr. Speaker.
THE DEPUry SPEAKER (Rep. Gullas). Session is suspended
minute.
o Itwas 5:40 p.m.
At 5:41 p.m., the sessrbn was resumd.
THE DEPUTY SPEAKER (Rep. Guflas). Session is

resumed.
0{'} 5i
REGODON - 2 Novenber 22, l9!q 5:40 p,m.
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The Chair recognizes again our distinguished Chairperson, the Honorable
Macario Laurel lV, to resume sponsorship of Housc Bill No. 6814. The Chalr,
likewise, recognizes our distinquished Minority Leader, ihe Honorable Feliciano
Belmonle, io begin his inierpellation.
REP. BELMONTE. Thank you, Mr. Speaker
Will my esteemed colleague yieio?
REP. LAUREL. Mr. Speaker, before i yield, let me just state for the record
that the Minority Leader, the Gentleman from Quezon City, was one oJ those who
attended the marathon session of the Committee on Banks that lasted eight and a
half hours in consideration of this House bill, Mr. Speaker. I am now ready to
yield.
REP. BELMONTE. Yes, thank you. That really was a show of interest in
and concem for this bill; although I understand he is not specifically a membbr of
:
the Committee on Banks;
Now, Mr. Speaker, i realize that this bill has been pending for quite a long
time, and that as I sJated when interviewed at one time, I think that this bill's time
has come.
So, just a few clarificatory points. First of all, Mr. Speaker, can we have
a
confirmation that the committee will introduce or will accept the amendment
to the
efiect that whenever in the apprication of roans, and whenever
the term ,frnancial
statements" is mentioned, we are talking of fihancial statements
that are duly fileo
with the Bureau of Internal Revenue? Can we accept that, your
Honor?
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VIVERO - 2 November 22. 1999 5:45 p.m.
(PO - DEPUTYSPEAKER GULLAS)
REP. BELMONTE. ...will the banks dispense with the need for a BlR-filed
financial statement?
REP. LAUREL Welf, Mr. Speaker, in the micro-finance business, we
envisioned, for instance, a borrower who is in the business of selling fish balls. lt
is obvious that this particular borrower will not be able to present a financial
statement so that even if I cannot clte a figure as to how much, I believe that the
Central Bank would realize that they may not be able to require a financial
statement to be submitted hy this particular borrower
REP. BELMONTE. Right, Your Honor, my point is not really to establish a
definite figure at this point, but merely to give a ballpark flgure so that at the end of
the day the Central Bank * v,rhen the Central Bank issus an appropriate
regulation * it is not a ballpark away from the intention with which I agree, really,
at this point. And so Fifty Thousand and below, more or less? Because, you
know, we may end up with a San Diego here applying for a loan, claiming to be a
small-time fisherman. So at the end of the day, it is also necessary for us to have
a * som kind of a ballpark figure

- what we are talking about when we talk about
micro-finance. on the other hand, if you have a definition of what is micro-finance
and you will mention it herEir{mightfind that it is a satisfactory answer but if

micro-
finance is what the centbhBanhmysnit is, then I would rather, your

Honor, that
we just cite a figure which is not non-binding but definitery gives

an idea of what
sort of baflpark we are talking abouthere.
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VIVERO - 2 November22.1999 5:45 p.m.
REP LAUREL. Mr, Speaker, Gsntfeman from orrezon City, t really would
like to be very cautious about r:iting figures. Yorr see. a big corporation who
should be paying taxes may borrow Fifty Thousand. In other words, if we base
the requirement of a financial statement on a definite amonnt maybe, we could be
mistaken, or we could err in not requiring a financial statement. But at any rate, if
the Gentleman from Quezon City is willing, perhaps a more genral description
tr/ould be acceptable to the Gentleman from Quezon Cig. Say, a borrower who
cannot afiord to have a financial statement may be exempted. But at the proper
time, this Representation is willing to accept any amendment that he may want to
present.
o REP. BELMONTE. Yes. You knory, I do not want to belabor his poinq
Your Honor. But to me;"tfrla,iJibngrof the',most important provisions that can be
put into this law because I know, for a fact, that so many people, both juridicat and
in their personal capacities, do submit applications for loan difierent from what
they - on the basis of financial statements - different from what they file in the
BlR. This is very important now, for inshnce, because we see that the BIR just
isn't collecting enough, and I feel that there are people who
- businessmen vn
- who are not paying enough. And I speak with some authority here, your Honor,
because I do remember when I was lawyering for somebody. Of my personal
knowledge, I knew exactly what the business was all about. and then when I was
working in the government, I saw that the financial statements submitted wereten,W
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DOMINGO.2 Nov. 22,1999 5:50P.M.
a (P.O. - DEPUTY SPEAKER GULLAS)
REP. BELMONTE. ..,and it is about time now that we do so because this
is an opportune tlme when we are amending the General Banking Act'
REP LAUREL. Yes, Mr. Speaker.
REP BELMONTE And may I also recall that even the Secretary of
Finance who incidentally was one of the GFI Heads when I am talking about this
incident-fully agreethat thattime when he was a GFI Hea{, being Head of the
pNB and fully agrees now when he is secretary of Finance with the need to use
a
and
bona fide or at least, the RIR fofms or tax forrns u/h,1n transacting business
where financial statements are required.
REP. LAUREL., Yes, Mr. Speal(er, Gentlem:rn from Quezon City' this
Representation is willlng to accept an amendment statinq in general terms that for
those creditors or bonowers who are required to submit financial statements'
these statements must be the same statements submitted to the BlR, We Can dO
that.
REP. BELMONTE. Yes, thank you, Your Honor'
Now, I was reading an afiicle over the weekend and I was amazed to find
the statement that in the Philippines, and in fact, this is not peculiar to us but t0
o some extent the situatldh*igfilryrobbining in our neighboring countries. In tlre
Philippines referring tor$,non'!flfilncial,corporations - okay, so banks are not
specifically mentioned here really, perhaps, for lack of clear data - non'flnancial
corporations listed in the stock exchange. They found out that the Top Five
individual owners of these corporations owned an average - together - an
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DOMINGO - 2 Nnv. 22. 1909 5:50P.M.
average of about 63 504 of everyihing in that corporation. Now, really, we have
this mistaken notion here that rvhen corporations ar'' reqistered in the stock
exchange and Virtually all banks are reqistered in the stock exchange all the
commercial and universal banks, that these are alntost already public
corporations. So, it really comes as a surprise to find that the Top Five
StoclfiOlders On the average controls 63.5o,6 of the capital of these corporations
Now, tdon'tthink banks are any exceptlon to that observation, Your Honor, and
in fact, it may be worse in the case of banks. Because virtually all the major banks
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in oUr country are SOmehoW related tO a family or to a group of businesses I think.
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Would you agree with that observation, Your Honor?
REP. LAUREL. Ml:*speaker, Gentleman from Quezon Clty, perhaps ln

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the beginning. In fact, even,in the United States many of the banks started with
family corporations and through the years they have expanded becaUse there iS
always a limit to the funds of a family in trying to maintain control of their

corporations. so, through the years, they get additional investors because they
have to invlte other people in the increases of thelr capltals.
REP. BELMONTE. Stlll, Your Honor, when I look at it, we have the A)/ala
Group which ls as publlc as you can get In thls country and as blg a
conglomerate as you can get. BPI is identified with them, they share the same
major stockholders, perhaps they share the same officers as well, the dlrectors as
well, and so forth. So, very clearly identlfled wlth a famlly or lf not a famlly, at l6ast
with the businesses of that family. METROBANK, the biggest bank in this country,
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Nov.22,1999 *' 5:50P.M.
onfoiled byr@qodlVuand
;nobody else' The PCIB cabdng h he
obvlottsly,
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(P O - Deputy Speakeir Gullas)
REP. BELMONTE ...to the Lopez and Gokongwei interest at one tim -
two people. lt was at that tinre the tlrird or the fourth biggest bank yet two
individuals. The head of the Lopez clan and the head of the Gokongwei clan
really control the corpor atiorr notwithstanding the prsnce of their erstwhile
president. now the BSP Governor
So you see, w4 cnn qo on and orr here, \'r:ril Honor, and it is a fact of life
insofar as a developinq economy like the Philippines is concerned. . Ferhaps,
once we become a first

'r,orJd
couniry then pethaps the guys calling the shot will
own no mor6 than five (5%) porceni. But at this stage, it's not even families. You
could almost mention the rndividuals who call the shots in a bank.
o What is the second biggest bank rrovr? | don't know but assuming that it is
the EBC-PCI Bank - well, let's face it, George Go, I think, calls all the shots in that
plac6, Your Honor. I mentioned this not to disparage it but it is just a fact of life at
this stage of development of the Philippines. And my point really is, this really
becomes important because of the fact that a lot of people or lot of businesses
organize banks to.cater primarily to the needs of their businesses.
I believe thatrtherrules.on DOSRI right now are strict enough, perhaps too
strict even. But I believe also that the performance of the central Bank in regard
of policing DOSRIs has been, to say the least, unsatisfactory.
In fact, Your Honor, according to a report I read in one of these numerous
publications on the bank and the cenkal Bank, the central Bank gets
to know of a
DosRl account only when the bank itserf discroses it, you see, and that on their
c, Q{l 6ct u
Mlluna November 2?. 19!)ll 5:55 p.m.
:
I ov;n the examiners of the Centlal Bank ha've nnr.rnl ii566v61ed a single DOSRI
account. And on that basis, you might come to thc conclusion that everybody is
complying with the law tfrat in fact there are no violations of the rules on the
limitations of DOSRI abcounts. Bul we know that is not true because almost every
l
major bank that closed up, that collapsed was due to DOSRI accounts' Your
1 Honor. Name them and lthink that you will agree that it was because of DOSRI
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accounts that they collapsed. In other words, the owners, the guys who controlled
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the existing rules on the bank, are already hard enough and skict enough, yet
these things continus to happen? -- the Producers Bank, everything, the Orient
Bank, all the banks and I maybe a borrower of some of these banks in the future
so I don't like to mention all of them. lt's the DOSRI that brought them down, Yout
Honor, and the Central Bank learned of it only rvhen problems had already
evolved. And when people wre trying to locate what caused it, that's when we
found that there were DOSRI accounts. Yet, on the basis of any DOSRI accounts
being discovered by the bank's examiners, there are none. So, Your Honor, what
can we do there? What are other ways of strengthening the system, short of really
examining every single loan? ln fact, the Governor of the CB told me that the
o
problem is a lot of these are bogus loans, you see, dummy loans and so forth
that's why it cannot be discovered. But we cannot" just accept it at that, Your
Honor There mLlst be some way for bringing these things to light. And do you
have some ideas on this. Your Honor?
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Mlluna November 22, 1999 5:55 p.m.
REP LAUREL. Yes, Mr. Speaker - Congressman from Quezon City On
the first pointwhich isthe family-controlled banks in the "'./tpll

4
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LEDESMA -2 November22,19qe 6:00 p.m.
REP. LAUREL. ...famity-conkoiled banks in the country, well, I think not
for long, Mr' speaker, Genfleman from euezon city. you wiil probabry notice that
the central Bank has been slowly requiring the different banks to increase their
capital. And as I said earlier, the families really do not have unlimitEd resources
and in time, they will be required to merge, if not invite other investors. For
instance, the Gentleman from euezon city, Mr. speaker, mntiond the Bank of
Pl. we are told that the Bank of pl is considering marrying or merging with Far
East Bank' Incidentally; Far East Bank is known to be not a family-owned or
controlled commtcial bank or universal bank, it is owned by difierent groups.

And so in time, all these banks will have to merge and therefore, the family
holdings will be diluted.
On the second point of abusive owners, as far as DOSRI loans are
concerned, to bgin with, the central Bank reguires that all banking institutions
report their DosRl loans. unfortunately, if there are dishonest bankers, they may
not do this and there is really some difficulty in discovering which are DosRl
loans. Unfortunately, by the time it is discovered because somehow, the abuses
and the criminal acts and dishonest acts of bankers or officers and
o staff members
in time are discovered. There is no stearing that is never discovered.

The onry
problem is when did we discover? rs it too rate?
Has there been so much money
stolen? And this is reaily what is happening to us The examiners

from central
Bank I am sure cannot find very easily the loans that
are being hidden from their
knowledge. 11,
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LEDESMA.2 November 22, 1999 6:00 p.m.
REP. BELMONTE. Okay. your Honor, so the Genfleman commented on
two aspects. Let me just make a counter commeni here. I feel, your Honor, that
the example you cited, BPr acquiring Far East Bank proves my point rather than
yours, Your Honor. Because I know for a fact that Far East Bank was
created by
the late Jobo Fernandez by talking to 10 friends or 20 friends. so that these are
the families that together, not one single family but a bunch of crony families or
friends' families, put it together. whatever it is, it is a commendable bank in the
sense that not one family controlled it. But now, this corporation that is controlled
by 20 or more families and which was an innovation when Jobo Fernandez first
established it two or three decades ago, unfortunately, it's the wrong bank eating
up the bank, Your Honor. What was once a bank owned by many people, many
families, will now become submerged into a bank that is dorhinated by one single
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So, at any rate, theoretically, I guess, as yor., saicl ths Central Bank requires
ever increasing capital, so people have to think of all sorts of ways to raise tre
money and still retain tontrol of the bank.
But on the second point, your Honor, you said that there are dishonest
people doing criminar acts and so forth and I guess there are because
eventuafly
they are found. out when the bank collapses. But if the bank somehow
doesn,t
collapse, they are very rarery found out. Now my question, your
Honor, is this, to
your knowledge, how many criminal actions have
been filed by the central Bank
against...tel/, fi
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nf, tii;,
CJAeuilar - 2 Novenber 22. I9gg 6:05 p-m.
a
(P0 - Deputy Speaker Gullae)
REP . BELUONT_E rhc: Cen j, r,n i B&nk asa tnet tfr*

blgwlgs r..,f L,anke'7 l. f, rnean the ac_.countante, the
rjtrLtt-
tellere;. for ther.e p11pt; l_,r- qr11te a nrrmher of the6e. I em

talklrrg about, bank r,rer:ldenls, bnnk cllrert,ors, and ao forth,
Your Honor, to yr_rq1 knc,wl.erlqe.
REP. LAUREL. Mr. Speaker, Gent,lernan fron guezon Clty,

Ot
I an not aware of presldentB of banke b,elne eued er.lnlnally-
But I am told that the Centra.l Bank le alrout ready to fl-le a.
crlmlnal caee agalnt the FreBident or the owner of Orient
'I Bank. r have been glven a ri't of in*titr.rtlons where cages
have been flled by the Central Bank-of course, theee are
:
not lhe blg comnerelal banks or- unlverlsal banke*Rural Bank

i,
.,1 of Balagtae, Obando Rural Bank, Rural Bank of panate, of
,t Leon, Rural Bank of Bato, paeacao, Bacong Gubat, and eeveraL
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other thstltutlons.
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Yee, Mr. . Speaker., , Gentleman from Quezon CttV, the
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:'J blgger. organlzatlonE vrould be the Monte do Pledad and

a Savlng' Benk fc'r engaglng r.n uneafe arrd uneound buelneee
.l practice. There ie a caBe flled by the Central Bank,
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FEP. BELH0NTE. Agalnet?

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dlrectars end .offIcerl of
REP. LAUREL. Agalnet the.
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Monte de Pledad. And as f mentloned, Mr. Speaker,
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CJAgU i lar -2 November ZZ, IggB 6:05 p.n.
dlrectore and oft-icere of Homeownere SavlnEe Bank whlch have

Ireen neferre,l to the NEI for further lnve8tl.gatlon,
REP. BELI4ONTE. yee, ,your Honor. In the caee of the
Monte. de Pledad, I gueee the Central Bank could not help but
flle aonethlng becauee vlrtus.lly all the fecte of the ceee
arle known beeaudsxrofc'{iirthe.. ndla, and lt le the medla nore
than the Centralr"BoJrk lthat fonced the flli.ne of a caee.
Inctdentally, Your Honor, there wae ,s pergon who was
lnvo-lved there who has elnce become the founder of a savinEe
bank, Your Honor. Wae thLe eavinge bank closed?
REp. LAUREL. Unfortunately, Mr. Speaker, the
repretsentatlvea of the cenirar Bank who are here wlth uE are
o not fantllar wlth thle caee.
REP. BELMONTE. Wetl, all rtght. yr,rur Honor. So we
have all of thege eavlnge banke an,1 rur.aL banke and ao
fonth. And I gueee that does not glve ue ae much comfort e.s
&/e woufd ]Lke to have 1rr our capaclty ae depogltora and even
aa government offlciale, your Honor.

You know, to ne, really, there je lro need to run afler
everybody. There le cnly a neecl to actually EUCcOid ln
Jalllng a few blg ehot.g to give, to ,:le Livei the neeaage to
everybody, speclally ir an econcrmv like orrre where
everybody
thinke thet a 11l,t1e r,ull here arrd a l.J.ttle pu1.1 there
1e
enough to ec) lve any pr.ob Iem . So thr t . yr,,ul
Honor , I hOpe
glven theEe new,rulea that we ar,e putting
up here aB well se
the strengthenlng of the bank, of the CB, whlch
hopefully
A"
Paee 2 fln 1i{;
6:05 p.qr.
I hope that the eenelbllltteg of the depoeltorg wlll be

taren lnto .ceount - The senelbrlitlee of the gov. ermpnt and
the rnrbllc wlLl be taken lnto aeco-unt eo that the guye, clo
not metamorphoee lnto even blggen bankers than they rvere
when they wene flret lnp11cated.
Now, Your Honor, I do underetand
Page 3
Ansula - 2 Nov. 22, 19gg 6:10 p.m.
REP, BELMO|''ITF ..1 tlo undersland thnt 0eneralf the CB hes two
br06d funcllons lhe olher one is lhe polk;y funcllrrn and lhe other one ls the
-
supervision functiorl. In some iurisdictions thess are reparaled inlo lwo differsnl
entitios such ai in lhe United Statee obviously lo prevonl lhe concentralion of
polver in ary single agBncy. Now, this bill seeks lo continus the prosenl practico
where lhe CB undertakee bolh functions. Now, this has been discussed earlier so
I do nol like to belabor il sxcpl to stale lhat 1 pereonalty betiovs thal lhis should
ba dons by lwo separate agencies and Inat tn my view as wr had beon looking al
ths lraatmsnt of DOSRI loans, lhe Central Bank just has not baen brilliant insofar
o a8 lh8 gupolvi$ion function is concsmd.
Now, Your Honor, lol ua tako a loolr al this ruporvision function rqr a
second. Have you ary#klebih0$t*many benks 0f every kind | thlnk we have sh

-
types 0r seven lypes of banks how many banks, how many quasl banks and so
forlh thera arc lhal arg now undgrlho gon6ral sup6rvision ofths Central;Bank?
REP. LAUREL. Mr. Speaker, if lhe Gentleman from euezon Cily has other
ques'tlons perhaps we .can go to the olher quesflons. We wlll

Just walt
REP. BELMONTE, Yes. And then I would alao liks to find out if it ie true
lhat the C8nlral Bank supeMses lhs pawn shop,s and how many pawn efiopa are
lhgrs. In cther words, if they could ju*t provide you, your Honor, and you provids
this chambsr lhe numsral$ wrth respscl lo all 0f thEs differsnt lypeE 0f agonciss
lhat are theoretlcally snd I am using that word advlsedly betng supeMfec
- -
by tho cenlral Eank,we can g6t 0n from there, your Honor, incruding
rurer banks,
r}{'! f i,
I
1a
i
i
i
tusula- 2 Nov.22, 1999 6:10p.m.
I lhink lhoy have il lhers, Your Honor. | 8aw il in ons of
How marry banks
3,536
.:|
l
-il
Whal about the olher typqs of banks, ygur
REP. LAUREL. Mr. Spoakor, I stand corrscted. Gsnllsman

from Ouezon
Cily, lhB figurc I cited onry rsfsrs l0 uniwr$al bankg The non-unlvsrsal ie 610
omcos.
:]
:
4dt liii
I
Ansula - 2 Nov 22.1999 6:'10 p.m.
REP, BELMONTE. Can I gel a clarlfication, Your Honor? The 3,536

refers to? .../ala
l-{,F
rt_l ?0
a
Bongulto -2 NOVEI{BER 2X, 1999 6rl5 p,m
a
(PO - Deputy Speaker Gultas)
REP. BELMONTE. ...The 3,b36 refers to?
REP. IAUREL. Unlwnalbanks.
REP. BETMONTEStu'UnlraBal."banks, alone. Do6s lhis Include lhe
eubsldlarles of unlvErsel'banksFbecsuss a$ w0 kn0w, they ar6 allo'f'ed lo have all
sorls of subsidisries. Now are lhe subsidiaries which are likewisc subjecl to
supeMclon by lhe Centraf Bank lncludd here?
REP. LAUREL. At lhs m0meil, Mr. speaker, Gonileman rrom Qu0zon
City, they are nol. However, under the new General Banking Acl and lhe new
Gentral Bank Acl, lhey are going lo be included.
REP. BELMONTE. I see. s0 Ju$t talt(tng about the htgh8st class 0t banlG
- lhe universal benke, lhe offlces lhat are now coverd by lhe supervioory
funcllons are already 3,536?
REP. LAUREL. Thal is conect.
REP. BELM0NTE. And to this, we wiltadd now the subsidtarles, afrllhteg
and those thal are controlod by the bank which i3 be,]lg"provldod ror h our
proposed ceneral Banklng Act?
REP. LAUREL. That is conect, Mr. Speaker.
REP. BELMONTE. And we are nor yet even rarklng about commerclar
banks, rurat banks, and sg forlh?
REP. LAUREL. That is right, Mr. Speaker.
REP. BELMONTE. you know, your Honor, thie comce

as a blg rurprhe lo
me because I was abour to say that there are more
rhan 1,000 pawn$fiops and I
({
nn 7.':.
i-i Q 7,
. Bongulto.2 NOr'Eli{BER 22, 1999 6:15 p.m
sm really amazed to flnd that there are 3,536 ofllces 0f unlver$al banks alone
even wllhoul lhe afrillates and subordinale companies and corporalions that
wlil be
also placed under lhe Cenlral Bank superuision by this law.
You know, Your Honor, ret us rook at it from a managem'nr poinr of view.
ls lt really posslble for the cenlral Bank lo supervlse all or these otflces? | meen,
don't we ihink lhal pawnshops, for instance, whal is lhe reason why cenlrel Bank
should be supeMsing pawnshops? Incldentals, how many pawnshops are

lhere
ln lhe counlry, Your Honor?
REP. LAUREL. Mr. Speaker, the Central Bank rreople, lhey do not know
how marry pawnshops.
1o REP. BELMONTE. Ail rtght, your Hon0r, you know, my polnt here your
Honor is, even if they are $upermen in the central Bank, il is jusl plryslcally
impossible to supervise all of these bodies. you know vlhat t am trylng lo say
here, Your Honor, is that this bill ie our greal chance t0 focus the cenlral gank on
lhe Inslllullons lhat reary affect the economy In a blg way llke the unlversal banks,
lhe commercia, banks and the quasi-banks, lhe operalions 0f which really can
atYecl lhe couree of thc oconomy, your H0n0r. And I rhink the centrat Bank
Jud
d
::.
o using tho g'nerar prlncipres of management wourd be a m0ro
'ffccrivs
body lf thcy
rl were lo concentralc on banksj&rilh8:real.mcc0y Inslead

of loslng lholr flme on ,0
I marry perrpherar InetitrJilons.vhlchsro, your Honor,
slso subject to eupeMrlon by
i
,l
agencre$ of rhe g'v'rnmeil erryrvay because rf r am not mrsraken 3om0 0f
'lher
lhaso ar abo rooked ar by rhe DTr, arso rooksd
ar by the sEc, arro rooked et by
lhe PDIC, also looked at by lh6 BIR csilalnly
r)
and so forlh, your Honor.
,f
- rln ??"
097d
fil
t!.
/}1
. Airyrtn-r l.IOVEl,tsER22. 1999

. 6:l5p.m
s0 rftar rs a proposlfion that I woul( llke to explore wilh you bmaurc
Lndu yow loederrhfi,Ihl* commlllee wllHn the nerl couple of dayr mry be eblo
lo rerlty makN tho contral Bank a more elfcclhe and focurod lmtnrmrntalily for ..
il011, lbr lhs goncnl pwporca forwtrlc{r lt rne creeled, your Honor.
And f you rylll egroe wlth lhc gcnsral prhchlc, your Honor, th|n wlhout
hering lo rlhcurr fr oprnry here, I guesr wc can discuss all eoilr of titrgr thrt
can bc dono, Yo|r]lonor.
REP. tAUREt.{m8pn|OlTtrccnilsngn ltsn euEon Crty...
,.i{,in{F"g'.i .
nfi ?s
a
:
fi\
l
BMCIA-3 ', l,lovember22. 1999 6:20 p.m.
a (P00eputy Spedtrrculb)
REP. LAtRE|-,,,,t'1sgl6rQlpglgp11forn euezon Clty b cornci. ln many

counfig3, h Europo;,i6 0p Unibd $tahE and 6vn in Ldh Amcrlca, thc trc
tunc{lons ars undcdaksn by two bodirx. There is really no hard and flst rulo to
say that they arc,more'succes!fril than a single organizaton llke ft cenhd
Bank so that ft can be elther way.
Nol, on the point of supervishn, to further strengthen the conccrns of the
Gentleman fmm Quezon city, there are nor s3 universal banks and comrnercial
banks, including the 13 foreign commerciat banks in tha country: 20 are ordinary
commsrclal banks, 20 are unlversal banks or a tohl of 53. lf w look at the total
number of offces of these pqdicular clasglf,cation, there are 4,230 officg. That
mans head oflico plus branches. tf we include the thrift banks, there ara 1
,474
thrilt bank sffices. Thqt is head ffics and branches. lf we abo lndude ttre rural
bank o'ffcos, lhere are J,940 rural bank oflicas or a grand totrl of 7,6rt!t oficos
around the country. Thereiore, I agree, Mr. syreaker, wlth the Gentlernan fiom
Quezon city, especially after finding out that thero are only E00 popls, mors or
less, in the supervision sactlon or sector of the Central Brnk
' The sxaminations by the supervlsors of centrer Brnk cxamrns pcr benk
office basis but the supervlsory secilon of the centrat Bank cxemlnes per
bank,
thorefore, the supervisory is on s3 commerciar bankg, 117 thrirt
bant<g and gzg
rural banks.
Now' on thc ma*cr of thc parrnshopo. l think rt b ilrila r{r. gpcrrcr and
crenileman from Quezon clty that Gongress decrdes
to p.dr q.d fisn he cnfal
.(
-l-
i
I of)
?.
BRACN-3
''
November?2,199$ 6:20p.m.
a Bank the supervision of the pawnshops. lf the Genfleman firom euezon city
would sponsor a bill to thls effect, this Repre*niation from the committee on
Banks rcufd be very happy to asslst.
REP. BELMONTE. Yes, YourHonor.
Wdl, thank you for this very revealinp figures whlch are somartrat blgger
than I had anticipated. I thought the answer *o" going to bo one or 2,fi)0
overall, and now l'm amazed to find that we have all of these llgures.
I guess it's really m wonder, Your Honor, thqt these mundsne thuqs that
we are talking aboui lika DosRts go und'tcted given the magnitude of the job
and th6 resources that are available to do this thing.
Particularly also if the central Bank is being rated, the perrsonnelen being
,1
rated on the theory ot how many benks were you abl to audlt, thon In that cas.
Your Honor, you get the biggest merits for number rather than for qrnlity of audit.
Because in the civil service of this country the units an what cornt and I guess
the unlts here will be number of banks aetually audited by a petson and, I thlnk.
thafs a heck of a bad tny of going about the probbm hf, yqr Honor.
fty*)r, Yanr Hour, me of the Heas that I thougf{ wr muld expton r{ght
l:l Irotv .,.

ti
t,
',1
-2-
40
CABANOS - 3 I lovember 22, J 999 6;25 p.m.
a (P0 - Deputy Speaker Gullas)
REP. BELMONTE. . . . one of the ideas that I thought we could explore
right now is this. As you know, one of the measures that keep on cropping up is a
measure to make government more efficient. And can you just imagine, your
Honor, a situation where - and I believe that their qualifications are the same in
this case, Your Honor, probably they are all either CpAs, or lawyers, or people
with similar qualifications. . You know, your Honor, this question of .examiners",
,] there are examiners in'thersE@$,there are examiners in the polG. The pDlc, tam
a
sure, is almost identicahwtttstheuxaminers of the CB itself; the BlR. and so forth.
I think that the central Bank * we should find a way so that the total resources of
the government can be mobilized where needed, like in the central Bank, in order
to augment the capabilities of the CB.
In fact, another trend that is going on in the world is ,,privatization." And, as
we have seen the heart of, or at least the customs, the heart of the customs' work
is being able to properly classify - | think that,s the word - classifo goods under
the proper tariff headings. And even in that case we now rely on a private entity,
like the SGS. And in other countries, even prisons are run privately.
a
So you can see, Your Honor, that the resources that are available to a
government agency are notjust the 900 people here, but all sorts
of resources in
the government itself and outside of the government And here, the least
*rat we
can do here, Your Honor, is also authorize the central Bank,
whenever necessary,
to enlist the herp - the cooperative herp of other aqencies, or even of the private
r'ld'] :i;
089$
CABANOS.3 November 22. 1999 6:25 p.m.
sector, through accounting firms and so forth

- to deputize them in order to carry
out this work, Your Honor. And I think it is better to do that than to have g00
people every year trying to examine the books of almost 9,000

difierent ofrces.
Your Honor.
And that is an idea that r hope can be deveroped by us here without
delaying the early passage of this bill, which I consider as necessary.
REP. LAUREL. Mr. Speaker, Gentleman from euezon City, there are,
again, two instances where the concern of the Gentleman from euezon
city about
auditing or examination is strengthened.
First, in this Generar Banking Act, there is a provision where the central
Bank is now relying on the private audit firms lf you will recall, they are asking
that the law be crafted in such a way that private aecorrnring firms, duly credited
by the central Bank, may be allowecl to audit. so that we can see that the central
Bank is already feeling the difficulties and, therefore, would like the private sector.
as suggested by the Gentleman from euezon city, to help in the auditing
examination of the books of the different banking institutions.
-SpeakerAtAlfredo
6:29 p.m., the Deputy Speafter retinguishd the Chair to Deputy
Amor E. Abueg, Jr.
REP. BELMONTE. yes, I recognized that, your Honor, and l,m glad you
reminded me because it had sripped my mind momentariry, but

that is true. And I
say that' perhaps, we can strengthen ihat even further by going

into other - wsrl
even other government agencies, insofar as the need for

examinalion is
concerned, if we can expand the power of the
centrar Bank - it is the cer*rar 7
(\v
1
zy
rln \,1 .
089t
ffi1
CAB/{NOS.3 I '
Bank hat we are relly looking at in deputizing not just oubide auditors. and so
forth, hlt oher ofrces as well. so that is the direction that I am drMng at, your
Honor.
And it is also a common sense type of recommendation, as is the one lhat
you read which I agree wiih fully, your Honor. .. . Ialc ,

.
/t tvr.r
it^'
1,|l
, i-:{tl*i!'-ritin r r!.ti .
ofi
0899
Daciito3 22 lrlovember 1999 6:30 p.m
REP. BELMONTE. .... agree with fully, yor-rr Honor.

j
Now, to sum up what I am saying, your Honor, is that the

CB should
focus on the rear prayers in the economy which are the banks. perhaps,
as
way down as the thrift"banks [maybe] or even some of the bigger rurar
banks.
l
j
But wlthin that focus, we ought to give them ail the abirities
- the resources, to
be able to do a good job. That is what I am trying to drive at here, your Honor.
a The second point I wanted to bring up, your Honor, and I think this
has
been brought up before, is this idea thatfailing banks be bailed

out. According
to my research, something rike r20 banks were crosed in the
rast eight or nine
years' but these are mainry smail banks Now, in the case
of the big banks, the
knee-jerk reaction of the cB is [really to allow them] to bail them

out through the
mechanism of giving them advances. And the funny thing about

it, for
instance, in at least one case invorving biilions of pesos is
not yet crear who
owes who money -- wheflrer the centrar Banks owes this bank something or
this bank ov,res something from the cB, And this is because, your Honor,
somehow there is a policy nf bairout rather than retting

the dice or the cards fall
o where they may. Because what happens he'e is that
the poor businessman
rryho borrowed, his business may be affected by the closure
ofthe bank and so
with the depositor whose recourse is to the pDrc,
but the big shots in the bank
[iustj somehow manage to get away with it. That is a poricy that I hope wilr not
be followed as a matter of course.
r!n
22 November 1999 6:30 p.m.
What I am suggesting, your Honor, is that when a bank fails because of
crfcumstances beyond their control like, for instance, the financial

crisis; then,
by all means, help them. But when they fair because of the criminal acts of the
owners, officers or their criminal neglect as in some of these things, then,

I think
we should make a distinction that the whore market, the whore banking
community must rearn that they harre to toe the rine because they are not going
to be bailed out if the failure is due to their own shortcoming, fault or,criminal
action.
o
And that is rny poirrt, your Honor, that v/e should get away from the
knee-jerk thing that it will panic the market and so forth. lt won't panic the
marlret. These thjngs have been happeninq [.,eforn ;rrrcl we have survived it. lf
we are already nratrrre enoLrgh, then I think r,r/e,Jorr'i have to be babied like
that.
But look at the causes and let the cB take a course of action that takes into
account the causes and not just the effects of the hank fairure, your Honor.
I would like to put that idea into the record of these proceedings,
.And now, one last question, your Honor A lot of leeway has been given
to foreign banks to get in the case of resuscitating a distressed bank. your
Honor, is there a more precise description of "distressed bank', than just that
they are dishessed? ls there something to do with the ratios,

the bushel ratios
that you were hlking about earlier, your Honor?
Or do we need to have the
closure and the pdnic,ahdlthe queuing of people before the bank?
Really,
Your Honor, what is the trigger point that
allows us to dtsregard... /cpd
i
N
rl0 8tr
"lil\r
I
'!ii r -i
SANTOS - 3 Nnvember22 19gg 6:35 p.m.
a
P O - Dep. Speaksr Ahrroo
REP. BElivioii'iE iirat air'ows iis tcr ciisiegard the existing
liniiiaiioiis provided"foi iii tite ia.w, ai-rti aiiow a savioi-, ii iliere is no locai savior a
foreign savior, ic, cOijje iii ai-rd save iiie baiik? is ihei.e a iiigger poini here,
Yoiii Hoiioi? | meaii, i just feei ihat siiice tire wr;i.ti "riisiressed" is air open
sesarr're io sometiling iliai is irew io iiie Geireiai Bairkiiig Aci, we sl-rould at
ieast lie inore precise as to wiiat we rr^rea ir by ii, yvui. Horioi.
REP. LAUREL. Mr Speakei., as fai-as a ijefiiiiiion is coirceii-red of a
disiressed baiih, tliere is no defiiriie ciefiniiioii.
REP BELlviOliTE. Even in tiie regulations of the CB?
O REP. LAUREL. However, if I rnay, they refer to a rlistressed bank when
it is undercapritalizedghen.it,is,insolvent, wlien ii is iiliqiiid.
REP. BELMOIiTE. When ii is?
REP. LAUREL. llliquid. In other wortls, it cairirot answer for the

.l
withdrawais of the deposiiiiig pubiic.
REP. BELMOi.ITE. Bui you know, your Hoi-ror, let me just tell you this.
I lf aii of iire noirper'oimiirg assets weie io ire biouglii io coi.irt in

a coilection
io case oi in a foreciosure case try iire banks irow, if iiie centrar
Bank were to
ioice iireiii io iake puniiive actioii agaiiisi nonpeifoi.rii-rg
ioa^s, then I say that
90% of aii of fi-re banks are going io fiiiti iiremseives iiiic;uiri
even in this times
of great iiquidiiy. ceiiaii-rly, ilre pioper iatios inost pi.obabry wiil not
obtain.
There is iire situation, your Ho'or. For the liast several years tn" Ca nfu
n{"} 8..
i;,.
\.:
)
SANToS -3 November22,lEEg 6:35 p.m.
,alfowed the banks to carry these nonpedorming loans on the theory that once
you foree them to take punitive aetion, the banking

system might be greaily
affecied.
So. on.that reasoning, your Honor, it is within the pow.er of the Central
Bank to immobilize a bank or not by simply ordering them to run after their
NTLs, and we do not like a sihation like that, your Honor
So, I reafly wonder. if it is enough to say that they are illiquid. There are
times when they are illiquid and that is why ln faci the Central Bank has a
mechanisnr for helping thenr when they are illior rirl hv being able to make
some advances to them, Arid uncJerca oita Iizeci, in relatiol to what? Because
if they are tt ndprca nitalizq'd h.rc6rrso of cycessirrr' londirrg lhen we are going to
Itii certain ratioS there and tirerp r,vrrrrld har..r: $eo6 a time When the Central
Bank should harle steppr:rr i,r and prevented thenr frorn rnaking further loans
which will affect tlreir ralios
So, you see, Yor,rr llono;, really lthink that betr,veerr now and the time we
pass this bill we ought to have a more precise - - and I ttri;-1p uou should ask the
Central Bank to come out with more precise gr.rjcJelines or indicators When the
mechanisms for distr.essed banks can be put into effect hy the Monetary
Board,
Your Honor. This rnust be one ofthose instances where congress cannotjust
let it up to the good sense of the Monetary Board withor.rt further guidelines,
Your Honor.
REP. LAUREL. Speaker, the Gentleman from
z on 8;:
.t''' )
fh...] ! :-r fai
. 1!l
SANTOS. S November 22, 1999
is a dishessed bank and we are requiring this definition, also pursuant t0 the
suggestion of the Gentleman from euezon Citv
REP, BELMONTE. Mr, Speaker', there has been already q wide
ranging interpellation on orrr dear and esteemed friend, chairm"n.oq 16"
Banking sector, and I yr/ias more concerned with the polioy direciions that we
can hckle and expand on in the period of Amendments, rather than
3 t,1
1l
a.
MALIWAT_ 3 I'lovembel 22. ] 999 0:40p,m.
Majority Floor
was a pleasure. Mr. Speaker. an$rerhg the questions
Qrlezon Ciiy and we certainly leamed a lot ffom his
Noted The distigutshed Malonty
SU9PENSION C)F SESSION
THE DEFUTY SPEAKFR {Rep. Abueq} The session is suspended.
It was 6'4U p m
. RESUMPTION OF $ES$ION
At 6:43 p.m., ft? ses,sror wa,s resut}?e{t
THE DEPUry SPEAKER

{Rep, Abueg). The session is resumed.
j
The d,stinguished Majority Floor Leader, /'}fi Ei. I
E
t
tr
I
t
:
i)
MALIWAT- 3 Novenrlrer 72 1999 t:40p.nr. 2
REP. BATERINA. Mr. Sp+aker, may I move that the Genfleman tofi the
1'' Distnct of Makati be recognized to interpellate the distinguished sponsor.
THE IIEPUTY SPEAKER (Rep Abueg) The Genileman trom the 1n
District of Makati is recognizecl for his inteil]ellation.
REP. ARROYO Thank you. Mr. Speaker.
. Will the distinguishecf Sponsor !,1elcl to some questions, Mr. Speakep
THE DEPUTY SPFARER (Rep. Abueg) He nray if he so desires.
REP LAURE| Mr Speah.er, before I yielc{
REP ARR(lYo Mr speaker. nray I know just what is reaily the objective
of this bill?
REP LAUREL Mf. Speaker. before I yieid to the questions of the
Gentleman from Mahati, I woulcl just like to go on record
THE DEPUTY SPEAKER (Rep Abueg) ptease proceed with your
statement.
REP. LAUREL- . - that the Genileman fom Makati was one of those
Meffbers of the House wfio attended the eight-an*a-half hour

marathon sesslon
in the...l
nfl B:;
(:
Cejes-3 Nov.22, 1999 6.45 p m.

a
(PO-Deputy Speaker Ableo)
REP- LAUREL.. .. . marathon session in the criscussions of this General
Banking Act and he stayed until the end ofthe sessiorr.
THE DEPUry SPEAKER (Rep. Abueg). The statement is duly noted.
REP. LAUREL. I am now ready to repry to the questions of the Genfleman
from Makati.
THE DEPUW SPEAKER (Rep. Abueg). The Genileman from Makati may
proceed with his interpellation.
REP. ARROYO. Before I proceed, I would like to thank the distinguished
O chairman for his kind words.*8ut let' me reshte, just whai is really the objective of
this bill?
REP. LAUREL, Well, of course, lt is of common knowledge, Mr, Speaker,
Gentleman from Makati, that it istime after 50 years to revise the General Banking
Act. And as far as the purpose of this bilr, it is reaily towards the direction of
promoting a sound, siabie and globaily-competiiive financial

sysiem anchored on
a
prudent risk management practices.
o REP. ARROYO. I asked thts, Mr. Speaker, bcause banklng ts an
industry. Now, taking a rook at the whore committee Report, it wourd
seem as if
we just increased the powers of the Bangko sentrar
and the Monebry Board
without really touching on the more significant areas
where reform is needed. I
thought all along that this biil is designed to reform

the banking industry, In other
words' after 50 years, the banking industry was guided
by the Genrar Banklng
,]fi 3i;
I
a Cejes-3 Nov.22, 1999 6:45 p.m
Act. Now, the idea is to institute certain reforms to keep it in line with lh times.
So, may I ask, for insbnce,,there is nothing in the bill which would encourage
savings. Our base is-;v*y rweak, In fact, our savings rate is very low. My
assumption is that the bill,'would provide means by which we can stimulate
savings so that when we have savings, that is capital for the country. Now, could I
have some enlightenment on that why there is the absence of any provision that
would stimulate savings.
REP. LAUREL. Mr. Speaker, Genileman from Makati. To begin with, the
Gentleman from Makati is correct- We probably have the lowest savings in thig
part of the world. Now, concerning the promotion of savings, perhaps this should
o be a campaign ihat should be triggered by, perhaps the bankers association or
the Central bank in trying to encourage people to save, but incorporating the
promotlon of campalgn for savlngs Into the law may not really be necessary, I
think the Central Bank, Mr. Speaker, has the facility and the direction for this.
REP. ARROYO, Mr. Speaker, I don't know, brrt if we,are going to leave it
to the Bangko sentral and to the bankers association, I wonder whether they are
interested in that. I would think rhat all that the banks would like to have would
be
more profits. But to say that thev will join in the drive lor more .. /MVC
'ril .5 ,
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kr'-.GoDoN - 3 NoYember 22, 1999 6:50 p.m.
a
REP. ARROYO. . . . they will join on the drive for more savings, should be
said the centerpiece of the bill because that wili coniribute to capital formaiion
which iryre need very much. I would even think that enticing foreign investors to
come in woufd be secondary or incidental, if only the country has enough

savings, which we don't have so, lwould not belabor that point, all lwould like to
say is that will the distingrrishecl chairman be open to sujgestions

[amendments]
in the course of the amendment that would incorporate those things?
REP. LAURFi . i,iir. Speaker, we.1re pref)arcci io accepi ihe suggesiions at
the proper time.
REp.ARRoYO. Thankyou.
Now. ihe other one is, like for instance, the interest rates. Again, the
staiisiics show ihar we have one ofthe Iowesi interest raies in savings and one of
the highest interest rates in lending. why is ii that our banking industry is like
that? And again, I thought that that wourd be addressed on thrs bilr. so, l wourd
appreciate an enlightenment on that aspect, Mr. Speaker.
REP. LAUREL. yes, Mr. speaker. we think that it is not possibre to

legislate the savings rate. we have free market systems, Mr. speaker. And what
we really need ls ,a'ostrong.r'banklng system and more efflclent
llnanalal
intermediation, Because'the interest that we pay savings
is arso incruded in the
computation of the intere$t that we charge the
borrowers. And we have sought to
approve a poricy of a free market where the
banks can pay the interest that they
fN
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REC()DON . ] l'lovemtrer 12. l09!
6:50 p.m.
a
want to pay to the deposiiors and charge the interesi ihat they want to charge
the
borrowers.
REP. ARRoYo. But Mr. speaker, don't you think that unress we institute
coercive measures, ihe banks wiii noi cio anyihing aboui ihis. iihink we have one
oi ihe biggesi spreads between inierest on savings anci inieresi in iending. lt is
too wide.
Now, I can understand that banks would like to make money but who
makes the formula on that? May i have an answer on that, Mr. Speaker.
REP. LAUREL. Mr. speaker, Genileman from Makati, we wourd rike to say
that there ls a free market,ln the country and it is competition that wlll compel the
banking institutions to pay higher interest on deposits and to charge less interest
on loans. so that if you find a banking institution that is paying very low rates for
your deposits, you may go to another bank who will pay you higher.
And on the
part of borrowings, the same thing - - a bank may offer higher rates
and anothel
bank ma!1 offer lower rates - - and so the borrower or the depositor should be free
io go to any institution that is more favorable for him.
REP. ARROYO. Let me take that point one issue at a time. What is
happening in the banking industry is that the competition is for
customers. But
when it comes to rates. . . ieor
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TVMERO-3
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November22, 1999 6:55 p.m.
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(PO - DEPUry SPEAKERABUEG)
REP. ARROYO. .. .when it comes to rates, it is like the oil industry.

I am
not saying it has reached the level of a cartel, but the Bankers' Association talk
and they kind of fix. I like what congressman Moreno tord me; it is rike an opEC.
the oil industry. They have a difierence in centavos but the prices
are the same.
Now here, they agree on the rates -- savings and rending. what rwourd
reaily
want to find out is whether we can incorporate in the bi a measure that wourd. or
rather a mechanism that wourd comper banks to be abre

to increase their interest
on savings; only thai, on savings, as a starting point. Because we cannot..
Are
we earning four percent at the moment on interest? That sems to
be our
standard rate. I cannot imagine how I wourd put my money
in the bank and arn
four percent and is wiped out by the inflation rate of, that is, 7 or g%. so,
where
is the... In other words, if I put money in the bank, at the end of the year,
I will
have less money in the sense that I could buy less at the end
ofthe year because
inflation is 70,6 while the interest is 40,6. I mean, those things, whether that could
be addressed, That is my question, Mr. Speaker.
REP' LAUREL. Mr' speaker, Genileman from Makati, first

of a[. I wourd
like to disabuse the Genreman's mind on this issue
of the banking system of the
banks - agree among themserves to some kind of a carter.
I was a member of the.
Board of Directors of the Bankers' Association

of the phirippines and arso the
Rural Bankers' Association, much earrier.
And there is no agreemnt in both
associations' And I daresay that even the
Thrift Bankers,Association cannotfu
rln 9ti
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VIVERO.3 November 22, 1999 6:55 p.m.
come into any agrment as to how much to pay interest rates on savings, or time
deposits, or how much to charge interest for loans. I cannot accept, Mr. speaker,
Gentleman from Makati, that there is such a cartel; lhere is no such cartel. In fact,
this is my experience: "Dog eat dog" as far as business is conberned amongst the
difierent banking institutions so that you can find, for instance, in one particular
bank they offer you interest on current account - some rower, some higher. you
have savings interest from one bank, to another, different, and also on interest for
loans so that there is iro agreement among the owners or among the different
banking institutions. Now, on the matter of putiing some kind of a general
statement concerning tax or ceilings on interest for loans or compelling institutions
to pay higher rates for savings, at the moment, this is not the policy of the banking
system in the country. We are, of course, influenced also by the world banking
system - the lMF, the World Bank - and this is the trend or the pattern or the
situationworldwide.../acv fu.*-
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DOMINGO.3 Nov.22. 199f) 7:00P.M.
(P.O. - DEPUTY SPEAKER Gt.JLLAS)
REP. LAUREL. .,. situation worldwide, Mr. Speaker, Genfleman from
Makati City.
REP. ARROYO. Mr. Speaker, I do understand that you cannot compel
interest rates. However, what I am asking is, can we not be more creative?
That
is what I am trying to point out - to inject a mechanism that would enable us to
make our rates competlfivior,rrather to make our rates in.the case of Savings
to
encourage savings - to"enoourage,savings. our savings' base here is the lowest.
How come that other countries have high savings rate

- yes, and we don,t. I
mean, let us just start with savings. why is it that other countries just like our
neighbors, they have bigger savings than us. why and we don't? And it pains
me really that here you have the Bangko sentral talking big, talking things like
that but they are unable to sfimulate savings. why? Are we supposed to resign
ourselves and say, there is nothing we can do about it? So. I do not know the
answers myself, I must confess. But I would think that this bill if we are able to cto
something with this bill to make, to increase the savings of the Filipinos
then we
would have achieved something. lf we make this bill onry to increase the powers
of the Monetary Board or the Bangko sentrar, that does not reaily have much
impact. But we have to encourage savings now, how clo we do thaf?
HoW? 4%?
Again, lwill repeat. lf linvestmymoi.rey at4oa thenthe inflation
is 7%, so llose.
How can that be? That is why if we are leaving this to private banks to think
about this well, how do we do this? And that is realty my concern. And, Mr.
speaker, ret me add- you know, l was chairman
of the Board of the pNB for five
ra
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DOMINGO.3 Nov. 22,1999 7:00P.M.
yearc when it las a"g*rrnmtnt*bank;.,Slnce.anyway, that was ormed by tre

govrnmenf and we ur6rE mofivatd less tfian proffts, I kept on asklng,that
question. Horr/? And he Presldent then wias Ed Espiritu, a private banker. Hour
ftm we encgunge savings?"The sfrength of Japan is in lts savlngs, domesUc
savlngs because they have money in savings that is why it is like fiat ind same
as South Korea. Now, if something can be.../mvd
t 4{'l !lil
Mlluna Nor-rernher ?.,-,1an\ 7;05 p,m,
(P.O - Deputy Speaker Fbueg)
REP ARROYO. Nolv, if something can be incorporated here, I think all
the others here are not really that important. Take for instance, Mr. Speaker, the
intermediation cost is so high. I don't know how in the world the intermediation
cost is very high. Now, can we not fix, percentage wise, how much iould be the
intermediation cost? That's what I'm saying. when the banks just talk among
themselves - well, they have similar intermediation cost. I can't understand that.
Yes, if they don't talk to each other, perhaps yes. But if .they have the same
intermediation costi naturally the cost of money will be high and the interest on
savings would be low. These are the questions I would liko io be enlightened on
I to improve the bill. Anyway, we are still in the interpellation stage. lf I could have
some comments, non-binding comments, that's flne with me.
REP. LAUREL. Mr. Speaker - Gentleman from Makati, there is one area in
the inteimediation cost that we can look at and perhaps it will frelp reduce the
interest rates on loans. This is the tax angle. Perhaps, that's an area that.,..
REP. ARROYO, How much would be the tax there now? What
percentage? As a component of the intermediation cost, how much would that
o be?
REP. LAUREL. At the moment, Mr, Speaker, we have not....
REP. ARROYO. No, that's all right. I mean, let's not hazard an answer if
l
we are not sure. That's fine with me but that can be lopked into.
:i You know, the campaign of the government has been capitar formation.
I
1
was thinking that perhaps we courd start, you know.
',)
:.1
with savings and a[ that. so,
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Mlluna '
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November 22, 1999 7:0S p.m:
don't you think that there must be.some direction from the government?
' Because
let me look at it this way. When the government issued

treasury bills at a certain
rate, the bankers protested. They said the rates are too low. The idea of the
government in selling treasury bills with lower interest rates
than the commercial
awash with money. so, what wiil the banks do? what wifi they do with a[ their
money? So, it's a case of who would blinl<. Then that is wh-ere the quarr
between the BSP and Finance arose. BSp was compraining

that the keasury bilrs
were too low. Treasury said: ,'precisely, we want to bring it low.,, Now, in a
o
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LEDESMA - 2 November22, 1999 7:10 p,m.
i (PO . Deputy Speaker Abueg)
REP. ARROYO ..in a conflict, in a case like that, what do we do? Can
we do something also in the bill that we could incorporate those things so that
somehow there will be a meeting ground between the Bangko sentral and the
Finance. Do you think we corrld address that too. distinquished chairman?
REP. LAUREL.. Mr, Sprraker, Genfleman from Makati, I think it is difficult
for us to incorporate this particrrlar provision in the General Banking Act. This is
part of the day-to-day operations of the Central Bank.
REP. ARRoYo. You see, I agree with you that it is difficurt but what rwant
to find out is, shall we resign ourselves to this? when the Treasury Department
lowers the interest on treasury bills, there is a purpose. well, one is they need
the
o money butthe second also is that, in addition to that, to precisely force the banks
to lov/er their rates. A good mechanism, one could agroe or disagree but it is a
mechanism. so, ntrat do ws do with that? tf we think of something on that line,
will the Chairman be open for that?
REP. LAUREL. Yes, Mr. Speaker.
REP. ARROYO. Now, another point. l,m thinking about the bill,s penal
provisions. The penal provisions are ac.tually harmless in

the sense that it's not
going to send any bank president to jair, the same
way that bank presidents are
sent to jail in Japan and South Korea. ln Japan,
they even commit hara-kiri, you
know. Now, can ws not make that more specific?
REP. LAUREL. Mr. Speaker, Genfleman from Makati

City, the penal
provisions found in section gg refers
to the New centrar Bank Ac,t provisions.
I
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CJAgullar - 3 November 22, 7999 7: 15 p.m-
(P0 - Deputy Speaker Abueg)
. REP. I,AUTREL .lmprieonment of.not leee than two

i
yeare nor more than ten yeare. Thls covera the unlawful
0r
ungafe conduet of buelneee. And flnaltv, Sectlon g?, theee
are admlnletratlve eanct l-e-rne on banke and quaal_-banke. And
the flnee are leee, that 1e, not to exceed p3O,000 for gach
day of vloletlon.
Thoee ape the Rre&s. Mr. Speaker, Gentlenan frour
Makatt.
REP. ARROYO. Mr.. Speaker, I arn faurif ial wlth these
provlelrrno ln the Bnnflko SFnbI'al Act. But they w111 ncit
o eend to Jai.l, for lnr.:tance, a prea j.clen, !.rho connlved in
DOSRI loane or audltora that certlfied to false Etatenents
of examlnere who certlfted that they macle an examlnatlon and
found everythlnC ln order. Theee are the thlngs that_to
put more teeth to*lf vre a'e solns to neke a new law,
illlght
ae well put more teeth. So, wlll the dletlnsulehed Spoaeor
be wilflne to-rather, hle mlnd 1a open to ainendnente ln
thls regard?
nEP. LAUREL. Yee, Mr. SFeaker, Gent leman from Makatl.
REP. ARnOyO. Now, we have not ateo addnecsed
thc
que8tlon of how nany.:bank cloeuree
have ther.e been.
Deputy.*tSpeai*er., -.
--- _,Th? . G. +IapauJ.a,. neLlnqulahed the
uonatantino Chalr to Eep,
,/
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0{l $r,
C,lAgullar - B N'.rvenber' ?Z, 1gi-19 7: 15 p.m.
o
Mr. Speaker, my ullrleretan,l lng wlth the MaJorlty Leader

le that I w1ll lnberF,etlate up tt. Eeven-quarter, and
after
that, another matt,er wiI1 be tahen ur' .
THE PRESIDING OFFICER (Rep. ,Jarautra ) . The MaJorlty

Leader.
REP. ROXAS. May I aek for one minute suepenelon, Mr.

Speaker.
THE PRESIDING OFFICER (Rep. Jarauta). SeEeton 1s
-i
euapended.
ft was 7: t8
Seeg Ion
Thank you. f am
to the gr,ate ful
dletLngulehed Gentl.eman fron Maketl, Mr. Speaker, your
H6nor, for lnfornlng thle Repreeentitlon that we had
ln fact
80ne over the 7:15 nark by about three minutee. But he
hae
ao gracloualy aeeented.to contlnue hls queatlona
for another
o 11 minutea to 7:80. So I yleld..the tirne to the dle_
tlneulehed and hardworklng Gentlernan from Makatl.
REP. ARROYO. I dld not know that I am on boundary
here,
THE PRESIDING OFFICEE ( Rep. Jar.aul-a ) . The Gentlenan
fr'om trlakatl wtll go on h,lth hlelnterpellatlon.
^,r/
t4
Paee 2 " n,n

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Ansula - 3 Nov.22, 1999 7:20 p.m.
(PO - REP. JARAULA)
REF. LAUREL ...there wete 22 bunks closed 1 commerclal benk.

- 6:
lhrifl banks and 15 rural banks. This was highor comparsd to 1gg7 whErs 14
banks wero closod involving 1 thrifi bank and 1l rural banks.
REP. ARROY0. Now, Mr. Spsakr, isn't il lhat what we are eupposed to
ds in lhic bill ic adopt nrfla*Urr to prevent a recrJrrence of that? prevnt I

recurrenco of closureo and lhsre soem to bo ilo sBclron tnfro that rvould
m0Et tho
a problgm, whal I am saying is thet lhi$ bill is supposed to be a curatvs
measure.
REP, LAUREL. Mr. Spseker, i'facl, lhis is orre of lhe main roasona for
tha amendment which is the adoption of p^rdsntiar standards gMng m0rB p0wgr
l0 ruparvirion of lhd financial iffilituti0ns, we are also consslidaling lhe poyrErs
of central Bank in supervising so that this bill, Mr. spaaker, is rally strengthening
and giving more proleclion lo lhe depositors and the i veslors of th8 banking
syslem.
REP. ARROYO, So if that is the case, if w are lo l00k at lhir bill in

rslation lo Bangko'Sntral Act, this measure is actually a supplsmgnt lo the
Bangko Sontral Acl. D0 I undsrsland it c0nscfiy, distinguished Sponeor?
REP. IAUREL. porhapo lhe.beiler word, Mr. $paaker, Ganileman

from
Makati, is complemsnflng*0aclt,olhor.
REP. ARROYO..,rlrqlt'6ys1sn6 that ths Commillee

on Banking hae anolhor
bill which is al$o amsnding thr Bangko Sontnl Act. Am I conecl in that?
REF. LAUREL. Thal is conacl, Mr. $poaker, Ganlleman

from Makati.
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Ansula - 3 Nov 22,1gcg 7:20 p.m.
REp. ARROyO. Mr. $peaker, if the disringuished sp'nsor F open lo

any
kind of amendmenls during lhe period 0f amBndmenls, do we havu thal asgurancs
which, ralher lhan me inlerpellaling on theso various issuas when annvay il will be
' leken up durlng lhe Perlod of amendments we undrstanrt that the dlsllngulshed
-
$ponsor has an 0p8n mind in all of lhese things,
REP. LAUREL. Yes, Mr. Speaker, we have an open mind.
REP. ARROyO. Wefl, becaurs if tne distingqishsd $p'nsor hai an opafl

I mind 0n thia, then I wiil just make rhe erpranation* during the pgriod of
amendmsnl$ ralher lhan erplaining things here lhBn we will again may repoal it
' during lhe pariocl of amondm8nts. will that arrangemenl be all right wirh lhs
rlistinguishod Sponsor?
REP. LAUREL. Yes, Mr. $peakol that anangemenl is acceptable..
SUSPENSION OF SESSTON
REP. ARR0YO. Can I tEvs iusl a minuls $u8p0nEion?
THE PRESIDING OFFTGER (Rep. Jarauta), $ession is suependad.
ft was l:24 p.n.
n{lil.tli: t0l.-
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Bongutto -3 NovElaER 22. i999 ?:25 p.m
(Fo - Depdy Spsrler. . f;bueg)
. _At f:28 p.n., the sessf,n wds nesumed, wfrh Deputy Speafc,, Alrcdo
Anor E. Abuq,Jr. pnsiding.
THE OEPUW SPEAIGR (Rep. Abueg). The cesston ts resum6d.
The Genllemen l?om Makaff may conflnue wiih hl$ intrpelldlon.
REp. ARROYO. Thankyou. Thanky0u, Mr. Speaker,
Agaln, I wlll arrude to the proposed meesure amendlng the

Bangko sontret
Act. There are certaln provrsrons rhere whrch grve immunrty to cortsrn
omc|8h of
rhe Bangk' sentrar which ofrhand, r c'nn't remember, but 8n erampr' b rhg
lmmunlly gken to examlners. Now, can we, in the perlod of amendmanl

- wlll the
dlsllnguighed Sponsor be willing to incorporata certain provisions,..
.1/
Q0-1.{f ti
097
BRACIA4 .
Novernber 22, 1999 7:30 p.m.
a (PCDcp'Xy Speaker Abueg)
REP. ARROYO. ... incorporate certaln provisbnE that would ilft that
immunity, not only of xaminers but aven officers so that they wlll be more
caretul ln thsir 19le as lBgulator of the banks? wil the dls$nguistFd sponsor be
wllling to ...
REP. LAUREL. Mr. Speaker, as far as the suggwteO amerdment of the
Gntleman from Makafi, if h6 wlll kindly give this Reprosenbton anurgh tirne to
conrult with the propcr authoritier rnd at the propcr thnc wlrcn rmerdmcntr ale
e in order, r,re lvould be mora than hsppy to entertein this ...
REP. AhROYO. yes, Mr. Speaker, as a matter of fad, wp rcdd be mora
pleased if the committee itssr, the secretariat, would makc tn prryoed so srat
... I do not haw to argue about that if the commtttee would meke the proposals
themselves and glve it to us rather than us giving lt to the committe. I think, it
will be mtdr bstter.
REP. LAUREL. Yes, Mr. Speaker.
REP. ARROYO. THngs that we havc dlscussed, br h!il.nce, bnight and

I r,rould suppore udfi Sro othec bo. [And one ost r {*tg b Utrt .bord &c ...1
!tHl, anfffiyy*ree,lrpromhod il Mrjority Leader thEt lwlllhrnlndc rt 7:30 ,,,
REP, RoXA*t*rr6p.rker.
THE DEpUTy 6PEAKER (Rop. Abrrog). Th6 drstlngubhed M{orny
Floor
Leader.
REP. ROXAS. We are buly indet*ed to the Gsrdsman lbon Makafl.

agaln by oversigtt, I had mlssed that lt is nwtr 7:31 and
thd wes b/l 7:flt.
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BRACIA.4 November22, 199S 7:30 p.m,
a REP. ARROYO. Mr. Speaker, it is not really that, we saw the Speaker
pass by so the MaJority Leader said, ',Sige naman magirabaho

tryo, andlyan si
Speaker,"
So thats about all.
So, Onnk you very much, Mr. Speaker. Thank you very mucfi, Mr.
Mainity tsader.
REP. ROXAS. Thankyou, Gentbman fronr Makati.
I urdelrtend thrt the Gentbmsn fnom Mek d wlll recurnc ...
REP, ARROYO. itr. Speaker, in debrance b UF i{aiod,ty Leadels

suggesilon, I will'brminde',my interpellation end then par enangennnt with the
dlsffngulshed Ctuirman m willJuS incorporatc csrtain arnendmentr.
I TF|E DEpUTy SPEAKER (Rep. Abuog). Ths drsrrngurr,hod xhjorlty Floor
Leader.
REP. ROXAS. lndeed, we ars very very gratefr.rl, sincerely to the
distingulshed Genthman frrom Makafi for his statesmanship and look forward to
hls insights and observations and contributions to the amendnrenb ttat will bo
discussed d the appropriete time.
At this juncture, Mr. Speaker, your Honor, may I move, hersdbre, that we
now cloee the period of interpeltation and debate on the raid maasuro,
I ro
move, Mr. Speaker.
THE DEPUW SPEAKER (Rep, Abueg), Any obJrcilon? ($/hnar)

Thrn
1 being none; the sponsorship and dsbate of said bill ls hcrby
1 dedarsd
I terminated. (Applausc)
I
I
!
nil l. t,ij
ir
BRAC!\4 f1 ' Novsnberz2, 1991, 7:30 p.m.
a REP. llUREL. Thank pu, Mr. $peaker.
SUSPENSION OF CONSIDEMTION OF H.B. NO.8814
REP. ROXAS. Thankyou.
May I move llkervlse, Mr. Speaker, that we nor temporadly sr,spend

conslderation of the mcasure, lso mow, Mr. SpeekEr.
THE DEPUW SPEAKER (Rep. Abueg). Any obffion? {Sflncc) Thr

being none; furiherconstderafron of tho measur is suspqrded.
Dirtinguished Maiodty Floor Ledor.
REP. ROXAS. Thankyou, Mr, Speaker.
Mr. Speaker, fur the information of the ltibmbers, and I esft that the
commlttee secrbriat, please take note that to the Extent thd rrw haw now
entered the perlod of amndments, pftaps tho ctElr, as tvell I the commlttee
secret.ariat can invlte all the various Membsrs to I pr-onbrerrco so that thes
amsndmEnts may bo discussed before having brought them to $e frmr. This is

a suggostlon, I undsrstand, fom the Chalrman that he tus accepbd the $id
.6uggedion, i&. Spssker.
THE DEPUW SPEAKER (Rep. Abuss). The chainnrn of tho aponsoring
commltee rs advised, as rsquested by the Majority Fbor tsr, b lrmfte alt

lhose who have prospective amendments to Inhoduce.
Dlrilngulshcd MrJority Floor Leader.
-t- 4fil f i;;

LflI utet )
DOMINGO - 2 llpn G 1,9r|$ 5:20P.M.
CON.SIDERATION OF H B AIO 6814
Contintlation
' Period of Amendments.
REP. GONZALES ({.). i now move ihat we consider Committee Report
No. 206 on House Bill No. 6814 submitted by the Commiilee on Banl6 and
Financial Intermediaries and for which purpose, I ask that the secretary General
be directed to read only the Utle of the bill.
THE DEPUW SPEAKER (Rep. Abueg). The Secrebry is so directed'
THE SECRETARY GENERAL. House Bill No. 68i4, eniiiied: AN ACT
PROVIDING FOR THE REGULATION OF THE ORGANIZATION AI{D
OPERATIONS Og eANKSdf,rQl'rf'^91'BANKS,TRLiST ENTiTiES AND FOR
OTHER PURPASES.
THE DEPUTY SPEAIGR (Rep. Abueg). Maiority Fioor Lmder'
REP. GOi{ZALES (N.). Mr. Speaker, ihe parliamenbry shtus of tre bill is
that, we are now in the period of committee amendments and for this purpose,
Mr. Speaker, I ask for the recognition of the distinguishsd Gentieman ftom
Batangas, the Chairman of the sponsoring commifree, the Honorable. Mai;ario
Laurel.
THE DEPii'i-t' SPEA1IER (Rep. nbueg). The ciisiinguishecj Chairman of
the Committee on Banks and Financial lntermediaries is hereby recognized to
propose committee amendments.
REP. LAUREL. Thank you, Mr. Speaker. May I proceed, Mr. Speaker, wifr
the specific committee amendments?
,. 00 4C
a DOMINGO.2 Dec. 6. l-q-q-s 5:20P.M.
THE DEPLiTf SPEAKER (Rep. nbueg). Piease proceed. Page 1.
REP. LAUREL. Page{trnsec.tion 2; No. 10, the first word "growing" witl be
replaced by the word IlEVtr9PlNO*l so move, Mr. Speaker.
THE DEPU'i-f SPEAKER (Rep. abueg). nny objec,iion? (Sitencc) There
being none; amendment,is'approved.
REP.LAUREL. Page2. Mr.Speaker.
THE DEPUTY SPEAKER (Rep. Abueg). Page 2.

a
REP. LAUREL. Thankyou, Mr. Speaker. Page 2.
THE DEPUW SPEAKER (Rep. Abueg). Next amendment.
REP. LAUREL. No. 18, insertion, lettcr "d)" "PUBLIC" SHALL MEAI{
TWENTY OR MORE LENDERS. WHETHER NATURAL PERSOi{S OR
JURIDICAL ENTITIES. I so move, Mr. Speaker.
THE DEPUTY SPEAKER (Rep. Abueg). Any objection? (Silznce) The
Chair hears none; amendment is approved. i{ext ameodment. Any further
amendmenton page 2? Page3.
REP. LAUREL. Paqe 2, Mr, Speaker, line 29, ihe worci "or'to be replaced
by the word AND. I so move, Mr. Speaker.
THE DEPUTY'SPEAKER (Rep. Abueg). Any objec{ion? lSiltacz) The
Chair hears none; the amendment is approved. page 3.
REP. LAUREL. Page 3, Mr. Speaker, Section 4, line 13, letter "(d)" after
the \ivords "Thrift banks," add the words COMPOSED OF (1 ) SAVINOS AND
MORTGAGE BANKS, (2) STOCK SAMNGS AND LOAN ASSOC|AT|ONS.
AND {3) PRIVATE DEVELOPMENT BANKS.../mvd
a 3
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LEDESMA .2 D'rcemhei 6, 193!l 5:30 pm.
a
1PO - Deputy Speaker Gullas)
RESUMPTION OF SESSIO[I
At 5:30 p.m., the session was resumed with the Deputy Spaker, the
Honorable Eduar& R. Gullas, presiding
THE DEPUTY SPEAKER (Rep. Gullas). Session is resumed.
HE DEPUW SPEAKER (Rep. Gullas). Distinguished Majority Leader, tfre
Honorable Mar Roxas.
a
REP. ROXAS. Thank you,.Mr, Speaker. Mr. Speaker, after consulting with the
, well as with the Senior Deputy Minority Leader, as well as other Members, Mr.
O Speaker, we note that the commiftee amendments being proposed by the
il distinguished Chairman of'the.committee are alrady contained in a document that
has been previously distributed to the Members dated as of 24 November 1999.
Mr- Speaker, Your Honor, in the interest of time, may I move with the
: unanimous consent of the Chamber, that we accept the committee amendments on
. an omnibus basis, without prejudice, Mr. Speaker, Your Honor, to individual Members
I presenting individual amendments even covering those committee amendments, Mr.
Speaker, Your Honor. That is the motion so as to enable Members to review the
document and propose their amendments individually. Again, without prejudice to
those amendments covering the committee amendments that we will haye acceptgd
on an omnibus basis.
I so move, Ur. Sp"uk"l..iF
00 tl7
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LEDESMA .2 December 6, 1999 5:30 pm.
I THE DEPUTY SPEAIR,(Rep. Gullas). ls there any objection to the motion?
(SrTence) The Chair hears none; motion is approved.
REP. ROXAS. Thank you, Mr. Speaker. And at this juncture, may I move that
we now close the period of committee amendments on House Bill No. 6814,
contained in Committee Report No. 206.
THE DEPUW SPEAKER (Rep. Gullas). ls there any objection to the motion
to close the Period of Committee Amendmenb on House Bill No. 6814? (Silbnce)
The Chair hears none; motion is approved.
REP. ROXAS. Thankyou, Mr. Speaker.
Mr. Speaker, for the information of the Members, the committee will be ready
to consider individual amendments on the said measure, even including those
portions that were adopted, that were covered by the committee amendments on
Wednesday, Mr. Speaker, Your Hr'nor.
THE DEPUTY SPEAKER {Rep. Gullas). Thank you, distinguished Majority
Leader.
SUSPENSION OF CONSIDERATION OF H,B. NO.6814
REP. ROXAS. Thank you, Mr. Speaker. Mr, Speaker, we would like to -
given that we have now closed the period of commiftee Amendments, may I move
that we now suspend consideration of the measure.
lso move, Mr. Sneaker

,4r
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00 4E
REGODON - 2 I )eccmber 14- 1999 6:00 p.m
a C'la
uft +)k1"t tI
l"l | ') | J_'
CONSIDERATION OF. H B NO. 6814
(Continuation)
INDIVIDUAL AMENDMFNTS
REP. GONZALES. Mr. Sncaker, I now moire thnt we take up (matters on)
the Calendar of the Unfinished Business, (particularlv House Bill No. 6814)'
THE DEPUTY'SpfRffn (Rep Gullas). ls lherc any objection to the
motion? (s/ence) The chair hears nonc; the motion is approved. The secretary
General is directed to read only the title of House Bill No. 6814.
..AN
THE SECRETARY GENERAL- HOUSE BiII NO. 6814, ENtitIEd: ACT
PROVIDING FOR THE REGULATION OF THE ORGANIZATION AND
OPERATIONS OF BANKS. QUASI.BANKS, TRUST ENTITIES AND FOR
OTHER PURPOSES",
REP. GONZALES (N.): Mr. Speaker, the parliamentary status of the bill is
that we are now in the Pedod of Individual Amendment
To respond to the'individual'amendments proposed by Members, I ask for
the recognition of the distinguished Chairman of the Sponsoring Committee, the
Gentleman from Batangasythe'Honorable Macario Laurel lll.
THE DEPUTY SPEAKER (Rep. Gullas). The Chair recognizes our
distinguished Chairperson, the honorable colleague from the Thkd Diskic{ of
Batangas, the Honorable Macario Laurel lV.
a
a REGODON.2 Decembcr 14, 1999 6:00 p.m
REP. GONZALES (N.). Likewise, Mr. Speaker, I ask for the recognition of
the honorable Gentleman from Makati to propose his individual amendment, the
Honorable Joker Anoyo.
THE DEPUW SPEAKER (Rep. Gullas). The Chair is very pleased to
recognize-our distinguiehed$mtleague, from the First District of Makati, the
Honorable Joker Arroyopt4?Entiltthisindividual amendments.
REP. ARROYO. Thank you, Mr. Speaker'

|l
I move and I hope the Chair would accept the following amendments:
On page 2,line24,the deletion of the phrase starting with the word 'and"
after the word "applied", and the rest of the sentence in tines 25 and 26'
THE DEPUTY SPEAKER (Rep. Gullas). What does the Sponsor say?
REP. LAUREL. Accepted, Mr. Speaker.
THE DEPUTY SPEAKER (Rep. Gullas). ls there any objec'tion to the
amendment? (S/ence) The Chair hears none; amendment is approved'
REP. ARROYO. And on line 27, the same page, Mr. Speaker, the deletion
r-t/)
of the words 'the overseeing". . . /edr L>zL.'r^--
9A 3:
i'". r.: a ":
VIVERO.2 December 14, 1999 6:05 p.m.

REP. ARROYO. ..."the overseeing". Yes, only those words and to
coqtinue on line 28. And in the sentence... on line 28, the deletion of the word
"investigating or examining" after the word '\uith"; and on line 29, excuse me, line
30, instead of "inquiring" the words TO INQUIRE.
THE DEPUTY SPEAKF-R (Rep. Gullas). What does the Sponsor say?
REP. LAUREL. Mr. Speaker, if I can request the distinguished Sponsor to
read... to indicate how it would read, Mr, Speaker.
REP. ARROYO It will read now, Mr. Speaker, like this, starting with line
27: "supervision" shall incltr.Ie not only isstting reoulations, but also to ascertain
that laws and regulations are complied with, to determine whether an institution is
conducting its business on a safe and sound basis, and TO INQUIRE into the
solvency and liquidqtion of the institution
THE DEPUry SPEAKER (Rep. Gullas). ls there any objection to the
amendment? (Silence) The Chair hears none; the amendment is approved.
REP. ARROYO. And on page 4, on lines 16. Mr. Speaker, after the word
"records" insert WHICH ARE REASONABLY and the deletion of the words "in
their judgmenf, and in line 18 to substitute the word SUCH for "all". And in line
19 afterthe word'records{'insertthewsrds WITHIN A REASONABLE TIME,
THE DEPUTY'SPEAKER (Rep. Gullas). What does the Sponsor say? l//
qn 'j;l
VIVERO - 2 llncembet 14, 1999 6:05 p.m.
REP. LAUREL. Mr. Speaker, if the Gent|eman from Makati wi|| indicate
how the section will now read?
THEDEPUTSPEAKER(Rep.Gu||as).otrrdistinguishedco||eaguewi||
please, proceed.
REP'ARRoYo.|twi||nowread,Mr.$peaker,asfo||ows,startingon|ine
,,The
13: department head and examiners of the appropriate supervising and
examining department are hereby authorized to administer oaths to any such
person, employee, officer or director of any such entity and to compel the
presentation or production of..." Excuse me, Mr. Chairman, I forgot the word --
the deletion of the word "all". "...production of sUCH books, documents' papers
or records which are.reasonably necessary to ascertain the facts relative to the
true functions and opsrationsi6f{sgch'person or entity. Failure or rfusal to comply
with the required presentation of 'production of SUCH books, documents, papers
or records wlTHlN A REASONABLE TIME shall subject the persons responsible
therefor to the penal PROVISIONS prwided under Republic Act No' 7653"'
THE DEPUTY SPEAKER (Rep. Gullas). What does the Sponsor say?
a
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THE DEPUTY SPEAKER (Rep. Gullas). ls there any objection to the
ll
l amendmenP (Silence) The Chair hears none; the amendment is approved.
REP. ARROYO. And further, Mr. Speaker, on line 28. This was proposed
already by the Gentleman from Muntinlupa who proposed that the period or the
'j.'
moratorium be for five years. Would the Chair accept two years? I mean... |'
/)11 l.;
a
7
VIVERO - 2 December 14, 1999 6:05 p.m.
THE DEPUTY SPEAKER (Rep. Guttas). What does the Sponsor say?
REP. LAUREL. Mr. Speaker, I am sorry but it is possible that, if we allorv
new banks to open, this may be better for the banking public because it may be a
better institution than the present existing institutions.
REP. ARROYO. Mr. Speaker, then, may I propose an alternative one?
Even one year because we are trying to enforce this law and.. .
THE DEPUTY SPEAKER (Rep. Gullas). What does the Sponsoi say?
a
REP. LAUREL. Accepted, Mr, Speaker.
THE DEPUTY SPEAKER (Rep. Gullas), ls ther6 any objection to the
amendmentof ONE year? ...lacv /.y^--
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DOMINGO - 2 Dec. 14, 1999 6:10P.M.
(P.O. - DEPUTY SPEAKER GUt LAS)
THE DEPUTY SPEAKER (Rep. Guilas) . ONE (1) YEAR? (Situnce) The
Chair hears none; the amenclment is approvecl.
REP. LAUREL. Excuse me, Mr. speaker. wiih the understanding that this
amendmeni or this prohibiiion refers only to commerciai banks. Because there are
other banking institutions like thrift banks, rura{ banks. we need them in the rural
areas, Mr. Speaker.
REP. ARROYO. That is the understanding, Mr. Speaker.
Now, on page 6, line 14, after the word .exceed", substitute the word
'Torty''to SXTY '

THE DEPUTY SPEAKER (Rep. Gullas). Whar does the Sponsor say?
REP. LAUREL. AocsptedjiilMF{.ispeaker.
THE DEPUTY SPEAKER (Rep. Gullas). ts there any objeciion to the
amendment? (Siknce) The Chair hears none; the amendment is approved.
REP. ARROYO. And it foilows that the figures "(4006)' becomes (60ye).
REP. LAUREL. Yes, Mr. Speaker
REP. ARROYO. On page 26,line number 6, to substitute the words ,?n
independent" to A REPUTABLE. Then to delete the words ,.to be chosen by

the
bank concerned from a list of certified public accountants.', In fact, that is on line
7' And may I read how it wourd sound now for the enlightenment of the chair.
REP. LAUREL. Mr. Speaker, with the permission of the Gentleman from
Makati, may I knowwhich number-- paragraph number?
ln-,6
DOMINGO.2 Dec. 14, 1999 6:10P.M.
REP. ARROYO. lt is I think, this unnumbered section - this is
unnumbered section. Line 4, on page 26 does not indicate the section number.
REP. LAUREL: t.rYes{$MrdlrSpeaker, we are now ready to listen to the
proposed amendment.
REP. ARROYO. lt will read now as follows, Mr. Speaker. "The Monetary
Board may, at its discretion, in specific cases where the circumsbnces so
warrant, require a bank to engage the services of A REpUTABLE auditor
acceptable to the Monetary Board. Nothing in this section shall be understood..."

now, it shall proceed as written.
THE DEPUTY SPEAKER (Rep..Gutlas). What does the Sponsor say?
THE DEPUTY SPEAKER (Rep. Gullas). ts there any objection to the
amendment? lSilence) The Chair hears none; the amendment is approved.
REP. ARROYO. On paqe 27, tines 22 to 23. I move that after the word
"regulations", we put a PERIOD (.) and delete all the words thereafter.
THE DEPUTY SPEAKER (Rep. Gullas). What cloes the Sponsor say?
REP LAUREL MT. Speaker, I am sorry | cannot find this in section...
REP. ARROYO Section 86
REP. LAUREL. May I request the Genfleman from Makati to please

indicate the proposed amendment again?
REP. ARROYO. On line 22, after the words ,,Bangko

Sentral regulations,,,
so instead of "comma (,)" we put pERroD (.). Then
a[ the words after that which
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a 3" en ,.h
fi4llu na Decenrlrer 14.191i': 6:15 p.m.
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Mlluna December 14, 1999 6:15 p.m.
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[REP. GONZAIES.(N). May I ask for one-minute suspension, Mr.
Speaker.l
THE DEPUTY SPEAKER (Rep. Gullas). The Chair now recognizes our
distinguished colleague from the First District of Misamis oriental, the Honorabfe
Oscar Moreno, to present his individual amendments.
REP. GONZALES (N ) I!1r. Speaker, before the distinguished Genfleman
from Misamis Oriental propose his individual amendments, may we just
acknowledge the presence in the rrpper lcvel of the South Gallery public
schoolteachers from various schools of the lfugao Province, headed by principal
Pedro Addug, Mr. Speaker. (A,pplause)
THE DEPUTY SPEAKER {Rep Gultas). We are very honored by the
presence of our teachers frorn lfugao.
REP. MORENO. Thank you very much, lvlr Speaker.
lv1r. Speaker, lhave sonre p!'opcsecl inclivic|.ral amendments. I wish the
Sponsor woulrl accept, Mr. Speaker.
The first, Mr. Speak,>r, is on page 5. lirres 5 to g, Section 10. lam

proposing, lVlr. Speaker, that we provide a iinrit of the nofr-voting shares that a
bank can issue in relation to its total issued capital. The reason for that, Mr.
speaker is, the cwnership linrits are based on the voting shares. And so to ensure
that the ownership would fall in the hands of Firipinos, at least the control,
consistent with the constitution, Mr. speaker, I wo.rrd rike to propos that banks
be limited as to the number of non-voting shares that it can issue

in relation to its
total issued capital.
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REP. MORENO. Lines 5 to g, Mr. Speaker, subjec{ to style, a proviso
which says to this effect that the total non-voting stocks that a bank may issue in
I '
relation to its total issued capital shall not exceed 1 O%. .
THE DEPUTY SPEAKER (Rep. Gu[as). What does the Sponsor say
subject to style?
REP. LAUREL, Mr. speaker, it is the understanding of this Representation
rl
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LEDESMA - 3 [J" centher 14. 19$lil 6:20 p.m.
a
REP. LAUREL. ..,this Representation's understanding that an investor in
a banking institution may not want to put up so much capital if he has no power to
vote. And so, it seems that there is no danger that an investor would be buying so
many shares and yet, not vote.
REP. MORENO. Mr. Speaker, with all due respect, the Gonstitution
mandates that the economy shall be effeclively controlled by Filipinos, And the
banking industry is indeedurmattertofrserious public interest. Now, the 10% may
be a high limit, so to speal@na'sffingent,limihtion because nothing will prevent
the banks from issuing non-voting stocks to foreigners and yet, the ownership
limits elsewhere in the law will still be applied, will still be complied with.
A case in point, Mr. Speaker, is PLDT where the non-voting stocks far
exceed the voting stocks. But simply because the Metro Pacific Group controls
majority of the voting stocks, Mr. Speaker, they already control PLDT which is
supposed to be a regulated or subject to the 400,6 limit in the Constitution. But
since the voting percentage of Metro Pacific Holdings.does not exceed or rather
the total holdings of Metro Pacific does not exceed 400,6, then arguably, pLDT is
within the constitutional limitation. But certainly, Mr. speaker, as far as .ontrt ot
the corporation is concerned, pLDT is within or under the control of the Metro
Pacific Group which owns 80% of the voting stocks, Mr. speafier. And for that
to
happen to a local bank, Mr. speaker, that would be, I think, quite dangerous,
Mr.
speaker. so, the purpose is to rimit the non-voting stocks that a Firipino bank may
nra
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LEDESMA .3 December 14, 1999 6:20 p.m.
'':
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issue which may be issued to foreigners or locals, depending on what that local
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bank so wishes, Mr. Speaker.
. REP. LAUREL. ls the Gentleman willing to increase the 100,6?

REP. MORENO. Certainly.
REP. LAUREL. Because we, at the moment, even allow 600,6 foreign
ownership in banking institutions.
REP. MORENO. Yes, Mr. Speaker. This is under 1721 , but what we are
looking at is the General Banking Act where the foreign ownership is limited to
40%. And, Mr. Speaker, just for the purpose of coming up with a figure that would
be liberal enough to these banks, probably 150,6 to 200,6 limitation, Mr. Speaker,
wquld be acceptable or would be - the purpose really is to ensure that the control
of that bank is in the hands of Filipinos, unless that control is allowed under the
lawwhich is under 7721 or under another section of this bill which is applicable
only with respect to distressed banks, Mr. Speaker.
REP. LAUREL. May I ask for one-minute suspension, Mr. Speaker.
' THE DEPUW SPEAKER (Rep. Gullas). Session is Suspended for one
minute.
ttwas 6;24p.m;$
Q,1 1
'l il
r.,r ttgul r ar - d [-rec,r'mber' f .i. 1!ir,)11 6:25 F.n.
( PO - Del"'uty Speaker Gullae )
RESUMFTION OF SESSI(-II']
Af' 6:27 p.n., the se.ssjcl h'd.s lFs;r?.r]1d.1.
THE DEPUTY SPEAKER (Rep. Gullae). Session is resuned.

REP. L"AUREL- Mr. Speaker.
THE DEPUTY SPEAKER (Rep. Guflas). Dletingutehed
of the Gentleman
increaae lt to ,..
REP. TCORENO. t, Mr. Speaker.
FEP. LAUREL. T'Wenty percent. Accepted, Mr.
o TIIE DEPUTY . Gullae . Ie t,here no
)
Speaker_
obJectlon to the amendment? ( Silerce) The Chalr hears'
none; the amendment 1e approved...

REP. MORENO. Mr. Speaker, :on page 6, Iinee 1 to b,
llne 4 partlcularly, Mr. gpeaker, lnete.ad of -'cdntrolltne
etockholdere", we refer to etockholdere OWNING MAJORITY OF
THE ISSUED CAPITAL OF THE CORPORATION"
THE DEPUTY SPEAKER (Rep- Gufj-ae) lÎhat does the
Sponeor eayl,
REP. LAUBEL. Mr. Speaker, nay we requeet that the
Gentlenan repeat the proposal " .
REP. MOhENO. Mr.. Speaher, line 4 would read aa

fof lowe: '* ehall fol1ow the cltizenehip f the etockholdere ._r
OWN]NG MAJORITY OF THE ISSTJED CAPITAL

OF. THE CIJRPORATION. ,. ,2.
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CJAgullar - 6,:25 p.m.
THE DEPTJTY {Rep. Gullae ) What doee the

dlst ingul ehed
REP. LLUREL. Aceepted, Mr. Speaker.
TFIE DEPUTY SPEAKER (Eep. Gullae). Ie there no
objectlon to bhe amebdment? (SjJence) The Chalr hears
none; the anendment ls approved.
REP. MORENo. 0n ttre same page, l{1 . EEeaker, page 6,
1lne 9,, If we can rleleie the wor.C ""iegitlmate,,, Mr.
Speaher, because lt shoulci read, the lirre should read,
"atherwlee he epeclficall;rr pr.or,lcled by 1aw no lndlvtdual or
hte epouee or. -'
THE DEPUTY SPEAKER (Rep. Gr:llas ) " does the
Sponeor eay?
T-t
REP. LAuREt. Accepted, Mr. Speaker.
Tt{E DEPUTY SPEAKER ( Rep. Gr-ri iaE; ) . I r: there no
objection to the arnendnent'2 (Siler:cer Ttre Chair hears
none; the amendment ie approved-
REP. MORENO. On F.sge 7, I4r. Speaker., lines 7 Lct I, Lf
it could read, llne 7 woufcl reacl ae followe. Mr. Speaker,
-:For purpoeea of .rehabi l ltat lan, tTLe
LtoneLa.ry Board may
exempt for a NON-EXTENDIBLS period nclt exceedlng flve-
years . "'
THE DEPUTY SPEAI{ER {Rep. GuIIas} in *ther worde .,,
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tcl -r ,
26234
t tusda - 2 Dec. 14, 1999 6:30 p.m.
(PO - DEPUTY SPEAKER GULLA,S)
THE DEPUTY SPEAKER {Rep. Gullas) ...1n olher w0rds, Inserl lhe word
NOI'+EXTENDIBLE ...
REP. MORENO. NON-EXTENDIBLE. That is right.
THE DEPUTY qPEAKER (Rep. Gullas). .., lretween .'a.' and lhe word
"peflod ".
Whal does the Sponsor say?
REP. LAUREL. Accepled, Mr. Speaker.
THE DEPUTY SPEAKER (Rep. Gullas). ls lhere any objscti0n t0 the
amendmsnl? ( Sibnce) The Chair hears none, the amendment is approved.
REP. MORENO. On page 8, Mr. Spsaker, line 15, if we can add a proviro
:': afier lhe word "relalionships" lo lhe effecl that NO FOREIGNER SI-IALL BE
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*POINTED TOA^lYiMgffiEmENiItPOSlTlON oF THE BANK.
t] tHE DEPUTY SPEAI(ER,(RcprGullas). What doas tho Sponror ealB
I REp. MoRENo. subject to etge, Mr. speaker.
REP. LAUREL. lam Bony, Mr. $peaker.

)
t
REP' MORENO. Mr. Speaker, tines 12 l0 '15, page B, ref0r to tho
' qualifrcalionr, so to spoak, of a director or an officer of a bank. Ar far as

t: dirctore are concorned, Mr. speakrr, majority should be Filipinos unless lhs
I Filipinos own less than 213 or 113 which is subjecl to Seclion 1 9. But wllh reepecl
to bank manag8menr, Mr. speaker, rhis Represenration would like to add a
PTOViSO IhAI A FOREIGNER CANNOT BE ALLOWED TO A MAMGEMENT

POSITION, Mr. Speaker.
r0L -ru $
Ansula - 2 Dec. 14. lgsg 6:30 p.m.
REP. LAUREL. Mr. Speaker, if we inserl lhis amendmenl, we will defeal
the plan t0 invil0 techn0l0gy l0 come lnl0 lhe c0untry and if we prohlbit oxports
from olher countries, lhen we may not really be able to learn. So if lhe
Gentleman rrryuld roconsidsr,'{hk'amsndment.
REP. Ir,l ORENO :$slrnm{roftrring i Mr. Spoak8r, lo m anagem enl position3.
Even in lhe ca$e of telecommunicaiions companies, Mr. Speaker, where
foreignere can oryn up lo 40%, no foreigner is allowed lo own or lo hold
managemenl posili0n8, svsn aE they can noK direclorshipE, Mr. Spsaksf, l0 the
exlenl of lheir shareholdings in the comparry. So in lhe case of lhe bank, as fat
as directorship is concerned, Mr. Speaker, lhen I have no problem with foreigners
t 0ccupying soats corresponding lo lheir voling sharehotdinge, Mr. Speaker. But
with respecl to managemenl, Mr. Speaker, I lhink lhis should be reserved lo
Filipinos, Mr. Speaker.
REP. LAUREL. I am sorry, Mr. Speaker. This Representalion is nol
disposed to accepl lhe proposed amendmenl.
REP. MORENO. So, Mr Speaker, is il the intenlion lhen that the hew
law, if approvod, will allow foreigners lo be pre$idenl of a local bank, Mr.
Speaker?
REP. LAUREL. Al the momenl, Mr. Speaker, llhink the managemanl of
arry banking inslilrJtion $hould be able lo delermine whom to hire, whethor he is
Filipino or foreigner. And also lhere is no prohibilion to hire a foreianer.
REP. MORENO. tlust wanled lo clarfo that. ldr Speaker, because ewn
under Republic Act No. 7721 which has riberarized the banking indusrry
as far as
S ii i'-t ii
r I
-1
,,f
Amd.- 2 Dec.14,1990 630p.m.
forcfn bankt ara concrtnsd;''manag0miril etill h retennd to Fillphot, Mr.
Speakor, wilh raspsct to local"banks'unlcmrcxcepl wilh resped lo locaibrumher
0f folthn Da*r. I am nol r8fcnhg l0 hcal branches ot fortlgn bef*t n(a t|olu
Kong Balfi, cnbenk, Bat* 0f Amcrlca, thsy can haw f0relgn 0fibsrs h thcsr
hrtilrtlons.
' REP.t-il,nEl. ltf.Sped<er,thlsRePresoddhn ...lda
0 0l-,-r1,
N
Bongulto -3 DEa'EiiEE-R 1'1, l!9+ d:i5 p.rn
(PO. Depuly $peaker Guller)
REP. IAUREL. .,.Mr. Speaker, lhis Represenlalion is informed that hirlng
0fforelgnrewlll 0fcoursebeeubJectedtotheimmtgrationlaws. lthlnkthailslhe
controlllng llaclor In the hlrlryi 0f fffelgners.
REP. MORENO. And under lhe immigration laws, Mr.'Speaker, ls lt the
lilntlon lhen lhal or is il the underslanding of lhe distinguiehed Sponeof lhal
breigner3 can bs elected presidenl$ 0f a local bank?
REP. LAUREL. t believe so, Mr. Speaker, especi6tly lf lhe forelgn bank
lhat come3 In ls lhe m4orlty and lhey prefer a forelgn presldent.
o
.ts' 6uspedd6d for one
,k
..' Llr{{rr.|'i,', r,l .
001'-ti
BRACIA-3 December 14. 1999 6:40 p.m.
o
tPoffi
ffi
Af 6:,f 0"p*lt#tfl sfonwas"resumed.
ttt OUpgf'*a?$PEf0(ER'(Rep. Gullas). The session'is resumed.
from the First District of Misamis Oriental. the
Honolable_![sreno.
muh, Mr-Speaker-
--REP-MOREN+Thankyourery
-Lt-rnrramrnlTrrproFsqrd ine
-f 5,pagttaw-eadd-IFd-6ilo,irdngproviso,t]rataN[FOREIGNEFSmtf
Bil--
APPOINTED IN ANY MANAGEMENT POSITION IN A BANKWHERE FOREIGN
OWNERSHIP DOES NOT EXCEED SIXTY PERCENT (600/o).
IryE lqqqrY_gIEAKER (Rep, Guilas). Vvlrar does rhe Sponsor say?

REP. LAUBEL Mr. Speaker, _earlier the Gentleman_sugqesteilthe __
REHTIORENO. f-anrsorry, Mr. peaker. UNtFffifl*ERttt$E----

AUT H O R-IZE D BY TH E Iii O NETARY B OARD
REP. I-AUREL. Acceoted.
I THE DEPUTY SPEAKER (Rep. Guflas) ls there no objection to the
o glendmeltlJSJlenceJ The Chair hears none; amendment is approved,
REP. MORENO Lastly, Mr. Speaker, paSe i2, Sectlan 3S.
TI{SEPUTY SPEAKER iRep- uilas). tine?

--- REP. MORENO. [inest 1 fo26, Mr.Soeerker.--
i
u r.J
-l '-r ii
a
180 7;
1
BRACIA-3 December 14, 1999 6:40 p.m.
- REffi is, Tvscan-ddd-df terlffi R-

THE PURPOS
SHOULD IT EXHIBIT ANY OF THE FOLLOWING: A) CAPITAL TO RISK
ASSET RATIO FALL SUBSTANTIALLY BELOW THE REQUIRED MINIMUM
CoNTTNUOUSLY FOR NTNETY DAYS (90) COMMA (,) WHICH COMIIIA (,)
UNDER EXISTING $TANDARDS COMMA (,) WOUID B-E BELOW,FLVE

PERGENT (s%i SEMIeoLON '{;} B) - V0LUNTARY --L6URE---R--
DECIARATION OF BANK lloLlDAY sEMlcoLoN (;) C) NON;COfrttPttA$eE-
! eoNTiNuousLY ovER oNF-'11-U-FTDRED ErcHTy DAyrrfgofoF A
REHABILITATION PIAN DULY APPROVFD BY THE MONETARY BOARD
SEMlcoLoN (;) D) OUTSTANDING EMERGENCY LOAN oR LoANs ARE
- f-AST D]IE qVER ONE HUNDRED EIGHTY DAYS (1QQISEMIqOLON (;) E)

PL,qCED UNDERBECEIVERSHIP-ORIJNDER IJQU|DATION.
Rtr. TAUREL-Accepted;frlr-, Speaker.
(Rep. Gullas). |s there'ild'6bl6etroT"1ilth

-THFDEPUTrSPEAI(ER -
amendment? (Silence) The Chair hears none; amendment is approved.
REP, MORENO. Now, Mr. Speaker, I have a suggestion, an amendment
on Section 38.
Page?
'l
present section allows one hundred percent (100%) foreign ownership of a

:
i
:,i
i
,i
lo
:tl
j
BRACIA-3 December 14, 1q99 6:40 p.m.
a
---tltstresssd
provisionsiffi
bank;su bisef folhsunwinding
ev'en undei721 whhh iia iiberalizato@

-tvt-i-Speakei,
engage in our country, ownership limit in the case of a local bank is 60% and
100% there is a limitation or there is a time fuse. Now, my proposal, Mr.
Spgaker, is, instead of "one hundred percent (190o/9ll! the allorable omership of
banks wauld belimitedlo $IXTY PERQENT (60%). with the proviso that
--ioreign
--'-the+ank+s netsmade investments-under-Republirc Ad 772i=--Nettif fmay-
-affi_ ndary Foaiii
0,
t___
-3-
a
1807:
CABANOS - 3 December 14. 1999 6:45 p.m.
aequire up to SIXW per cent (60%) of a distressed bank as may be determined
purposes of,lhis-section- a
* distressed bank shall refer only ts banks organized under the laws ef the Republie ,
---by -
ot me Pnrlrpprnes.
And then we delete the first proviso, beginning on line 15 up to line 19,
after the word "banK, and then we say: PRAWDED, HOWEVER, THAT THE
_----EOREIGN EANK AIJTHORIZED TO INVEST OR TO AEQUIRE TINDER THIS
SEGTION HAS NO{.{AADE ANYAEQUISITION OF A tOEAt BANKUNDER

REPUBTISACTITO.I-Z T
SUSPENSION OF SESSIOT.I
REP. MORENO. May I move for a one-minute recess, Mr. Speaker.
THE DEPUTY SPEAKER (Rep. Gullas). Session is suspeldgd_jql_ene _

minut.
-- -'f-was-6:4t-p.m.
4i.) " r'r

'- l .L _L i..
18008
Dacillo3 D-, -mt,er 14 I Cllrli 6:50 p. m.
a
RESI JMPTION OF .SESStot.,r
At 6:50 p.m.,lhe session was resumed.
THE DEPUTY SPEAKER (Rep. Gufias). Session is resumed.
Distinguished colleague from the First Districi of Misamis Oriental, lhe
Honorable Oscar Moreno.
REP. MORENO. Thank you very much, Mr. Spearer.
I withdraw my earlier amendment, Mr. Speaker, and propose the

a
following:
fHE DEPUW SPEAKER (Rep. Guilas). pase?
REP. MORENOilEagSfrtr'Q; line 12, Mr.Speaker.

o THE DEPUW SPEAKER (Rep. Guttas). ptease proceed.
REP. MORENO. Insert the following, between the words ,.banks', and
,' 'to" , Mr. Speaker, COMMA (,) SUBJECT TO THE SAME STANDARDS SET
:l
OUT IN REPUBLIC ACT NO. 7721 AND ITS IMPLEMENTING RULES AND
REGULATTONS COMMA (,).

L
l
THE DEPUTY SPEAKER (Rep. Guilas). What does the Sponsor.say?
t
THE DEPUTY SPEAKER (Rep. Guilas). ls there any objection to the
i
amendment? (Sitence) The Chair hears none; the amendment is approved.
.J
'I REP. MORENO. Mr. Speaker. I would like to thank the honorable
i
1
Sponsor for his kindness.
4'^. r"
J J..---rt
Dacillo3 December 14. 1999 6:50 p.m.
Thank you very much, Mr. Speaker.
REP. LAUREL.'.My"pleasure, Mr. Speaker.
THE OEPUTY'4SFEAKER,(Rep. Gutlas). Thank you very sincerely,
distinguished colleague, the Honorable oscar Moreno of the First District of
Misamis Oriental.
The distinguished Majority Floor Leader, the Honorable Mdr Roxas.
At this juncture, may I move that we recognize the distinguished
Minority Leader for his individual amendment.
lso move, Mr. Speaker,
THE DEPUTY SPEAKER (Rep. Guilas) The Chair recognizes the
distinguished Minority Leader, the Honorable Feliciano Belmonte, to present
his individual amendments.
REP. BELMONTE Jusi a couple of amenclments, Mr. Speaker.
THE DEPUTY SPEAKER (Rep. Guilas). yes, distinguished colleague.
. Page?
REP. BELMONTE On Section 13, page 6, line 11, add the following
sentence: BANKS SHALL SpECtFtCALLy DTSCLOSE TO THE BANGKO
SENTRAL ALL INDIVIDUAL AND FAMILY STOCKHOLDINGS WHICH ARE
suFFtctENT TO ELECT AT LEAST ONE (1) BOARD SEAT.
THE DEPUTY SPEAKER (Rep. Gullas). What does the Sponsor $ay?
/l.i:'
a
Dacillo3 December 14, 1999 6:50 p.m.
THE DEPU.TY SPEAKER (Rep. Guilas). ts there any objection to the
amendment? (Silence) The Chair hears none; amendment is approved.
REP. BELMONTE. Thank you, Mr, Chairman.
Now, Mr. Speaker, on Section 70, this is found on page 23, lines 15 and
16, this is the amendment, Yorrr Honor: Towards this end...
THE DEPUTY SPEAKER (Rep. Gutlas). Wnat tine distinguished
colleague?
REP. BELMONTE. Line 15, change the word "may" to SHALL. And
after the word "expenditures" in tine 16, COMMA (,) INCLUDING THE
CORRESPONDING FI|..IAIJCIAL STATEIVIEI.JTS SUBMITTED FOR
TAXATION PURPOSES TO THE BUREAU OF INTERNAL REVENUE WHICH
SHALL BE THE BASIS FOR ASSESSING THE LOAN TO BE GRANTED, That
is the amendment.
THE DEPUTY SPEAKER (Rep. Gullas), What does the Sponsor say?
THE DEPUry SPEAKER (Rep. Gullas). Is there any objec{ion'to the
amendment? (Silence) The Chair hears none; the amendment is approved.
o REP, BELMONTE. Thank you very much, Mr. Chairman.
That's it.
REP. LAUREL. My pleasure.
THE DEPUW SPEAKER (Rep. Gultas), Thank you very sincerely,
distinguished Minority Leader, the Honorable Feliciano Belmonte.
/'i ,'l i.:

'.j .t .- _.L)
Daciilo3 Dec.]mber 14 199.! 650pm
o REP. ROXAS Thank you, Mr, Speaker.
Mr. $peaker, there are no other reservaticns for individual amendmenb.
Accordingly, may I move that vre novr close the period of amendments.

a
. motion? (Silence) The Chair hears none; the motion is approved.
APPROVAL OF H.B. No. 6814 ON SECOND READING
REP. ROXASffiMfiSFeaker; at this juncture, may I move that we now

o
vote on Second Readihg||the+instant measure.

a motion? (Silence).The Chair hears none; the motion is approved.
rHE DEpury rr.^Jt;]ltifil-: many as those in ravor or
House Bill No. 6814, please say aye-
SEVERAL MEMBERS. Aye
THE DEPUTY SPEAKER (Rep Gullas), Those who are against, say
nay. (silence) The ayes have it; House Bill No 6814 is approved on Second
Reading. (Applause) .. ./cpd
a
SANTOS - 3 Decsnber 14, 1999 6:55 p.m.
P.O. - Dep. Speaker Gullas
THE DEPUTY 8PEAKER (Rep. Gulhs). . on Second Reading.
(ApplauseJ
REP. ROMS. Mr. Speaker, Your Honor, congratulafions to the
distinguished Chairman of the Commifree on Banks.
REP. ROMS. May I ask for a one-minute suspension so I nray ob,tain a
copy of certification that the extant measure is urgent as defined in our
Constitution.
THE DEPUTY SPEAKER (Rep, Gullas). The sessiofr is suspended for
one minute.
ftwas 6:55 p.m.
At 6:55 p.m.,lfiie sessrbn was res{lrr6d.
THE DEPUTY SPEAKER (Rep. Guilas). The session ls resumed.
REP. ROXAS. Mr. Speaker,
THE DEPUW SPEAKER (Rep. Gullas). The distinguished Maffxi$
Leader, the Honorable Mar Roxas.
The distinguished chairman d tfre commiftee wishes to manifed

additionaf coauthors of the measure, l ask frat he b4 rer;t{in?e(,
"-ZU
^ qr', lFt
SANTOS - 3 December 14, 1 999 6:55 p.m.
a
THE DEPUTY SPEAKER (Rep. Roxas). The Ghair recognizes the
distinguished Sponsor, the Honorable Macario Laurel lV.
REP. LAUREL. Thankyou, Mr, Speaker.
We would like to register Congressman Anqpinq and the Minority Floor
Leader, Congressman Belmonl*r, to be coatrthors of the bill as wsll as othrs
vvho are most welcome to ioin,
REP. ROXAS. Mr. Speaker, apiparently, many other Members wish b

do so.
May v*e ask them lo please raise their hands and to have the Secre&ry
General nde the names of the Members with their hands so raised to indicate
their desire to be cdauthors of the measure.
I so manifes{, Mr. Speaker.
THE DEPUTY SPEAKER (Rep. Gullas), The $ecrfiry General ls
directEd to be vely careful+lnrlldingrdown he names of our colleegueo wiro
have raised heir hands to be'coautfiorc of lhe measure.
REP. ROXAS. The $ecretary General, I undershnd, Mr. $peaker, ls
noddirg his'head that,he,has nded tre names of those wtro wish to bs
coauthors.
THE DEPUW SPEAKER (Rep. Guilas). Thank you, distirBuished

Majority Floor Leader.
NOMINAL VOTING ON H.B. NO.6814 ON THIRD READTNG

'-i
t
.i REP. ROMS. Thankyou, Mr.SOeaker.
i ,4
./
z
1ir . .3
SANTOS - 3 December 14, 1999 6:56 p.m.
Mr. Speaker, I have in my hand a copy of a letter certlfnng tre said
measure as urgent, purcuant to Article Vl, Sec,tion 26, pangraph 2 of the
Constihrlion. Accordingly, may I move that the Secrfiary General bo diracted
to read $e title of the measure, and subsequenfly call the roll for nominal vo{ing
so wB rmy consider. the{am*ofitThird Reading.
lso more, Mr. $peakEr
THE DEPUW SPEAKER (Rep. Gullas). ls there no objection to the
motion? (Siiefle,
The Chair hears none;the rntion is approved.
The $ecretary General is directed to read only the title of House Bffl No.
6814, conhined in Comrnfttee Report 206, and to call the roll for nominal
voting.
THE SECRETARY GENERAL. House Bilt No. 6814: 'Att ACT
PRQVIDING FOR THE REGULATON OF THE ORGAN|ZAIION if.tD
OPERATIONS OF BANKS, QUASI-BANKS AND TRUST EMTITTES:"
FIRST ROLL CALL
THE SECRETARY GENERAL , rwding: Roil calt of Memberu for the
consideration on Third Reading of House Bill No. 6814.
The Honorable Congre,ssmen and Congrmswomen:
Abad...
(lnsert)
Cojuangco. .. . - zj,
.,. j.: -,.1

3
a iuiALiWAT- l December i4. jgsg 7:0iip.nr.
. (PO . DEPUTY SPEAKER GULLAS}
THE SEC RETARY GENERAL eatJlng:
Coiuanoco . ..
{tnsedi
Zutrtrt.
.9EC{_}ND R{:}LL CALL
THE SECRETARV a-;ENERAL. readins gecond call for the consideration

on Third Readingr of Hoilse Bill lrio. EE14
The H0ncrable C0nqressmen aild Congress:w0men
. Amalonq .
{tnsert).
I t--^
UIItJ
APPROVAL (-}F H.B. NO, 68.14 O1\I TI-IIRD RE,A,D|NG
lHE OEPtJff $PEAKEF {Rep. Cjullasi. Edtth 1E_". affirmaltve yotes. b
negative votes, no abstention. House Bill No. 6814 is approve{t on Third and final "
Reading. (Arytausel
Congratulations_
REp. Rox_A.g_ Mr. ,qpeaket, congratulations in particular to the
riistingulshed chairmamoffihsbmmiiiee 0n Banks who shepherded

ilre measure
over sh lo nine months of tortuous journey from first filing

to the passage.
)r -2,)
a
Mlluna December 14, 1999 5r05 p.rn.
:
a
CCNSIDERATIOI'I OF I.] B I.JO,6814
purpose, may
o ls there no objection to the
is approved. :Ihe Secretary
Bill No. 6814, contained in
does. the
a
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Mllu na [.t,.-.c eril irpr 14. illi! 5;05 p.m.
a
REP. ROSALES. 1',4 r Speaker, parliarnentarv inquiry on something that r
find'rery urgent This has tc'd':i with the stairrs of orrr budget, the House Budget
that we had passed and had been tacklccl by ti-;e Scnatc.
I understand from very rcliablc sources ihat the budget, particularly for
agralian refcrm, ,"vhieh v,re had approved here at the House had been slashed
several times, P2B vrhich is supposed to be peid fot'the maturing bonds for
cornpensation to landowners. That lvas one. P1 28 for land acquisition was
slashed. P1 .268 was likewise slashed from the AFMA budoet. And to add insult
to injury, the budget from the DAR to the tune of Pl .28 was kansferred for para-
military operations.
o I would like tcrlucfiil&ff*Epeaker, th6 status of the budget right now.
And secondbpgW*tn{hiswhatris the Hduse going to do about it?
THE DEPUTY SPEAKER (Rep Gullas) Would the distinguished MaJority
Leader wish to respond to the parliamentary inquiry?
REP. ROXAS. Mr. Speaker - Your Honor, the parliamentary status of the
. budget is that there is ongoing a Bicameral Conference Committee to precisely
reconciie the disagreeing provisions. Needless to say, both the majority and the
minority are represented in that committee and they are meeting with their senate
counterparts over these matters, Mr. Speaker.
REP. ROSALES. But, tu1r. Speaker, I would like to know if the questions
that I had asked are true - if the points that I hacj raised about the slashing of the
DAR budget has beeh done by the Senate.
f],l 4-i
fuliluira lJecerirbcr' f ,i, '1 ii:rs 5:05 p.m.
a
REP RO)GS !';'!i Speal<cr, v;c v;r:ltld l'rave no ,#ay 0f accurately
respondir-rg to tii-c qi-rrry !r,i: can obtain a cop;, of thcs., questions and inasmuch
as this ;;ertains tc Scrrati: nr tion, scnd ii orrirr fc,r confirrnation by the appropriate
Senatc bcdy, l.Jlr S p+a!:ri
REfr. ROSA.i.FS !1r,,, s.on cln v-l.i (,r.t ;:] 11 anslver for this, Mr. Speaker,
because I think this 15; 1q1'; itr qent and | !,/a$ qriite bothered .. ../mll
Q4
,lil 4?.
LEDESMA .2 December 14, 1 999 5:10 p.m.
a
REP. ROSALES. ...1 was quite bothered specially when lheard that P1 .2
Billion of the budget from DAR was transferred to the CAFGUs for paramilitary
operations. I think this iswtneddtqilhatwe should qddress very urgently.

.
REP. ROMS. AgainpMr.,r,'Speaker, Your Honor, we shall transmit the
information to the appropriate Body in the Senate although it would be very simple
for the Lady or through her staff to inquire from the distinguished Chairman of lhe
Committee on Appropriations of the House or for that mafter, to inquire from

l
anyone of the Minority Members who are a part of that Bicameral Conference
Committee.
REP. ROSALE$. Or for that matter making an inquiry right here which is
what lam doing, Mr. Speaker.
REP. ROXAS. Precisely, bit...
REP. ROSAIES. So I would like to know - l'm sure that we can gt an
immediate answer for this, considering the fact that Members of the House have
been meeting with the Senate throu$h pre-Bicameral sessions have been going
on and when I heard about this, I felt that maybe, considering the fact that a
number of us, Members of the House, who are Members of the commiftee on
Agrarian Reform have worked very hard for the DAR budget and to hear auoutihe
slashing is something that we think should be responded to as urgenfly.
REP. ROXAS. Mr. Speaker, Madam Lady from AKBAYAN,

we would have
no way of ascertaining - this Representation wourd have no way of accuratery
cJl{
, 4
ini 4.i
LEDESMA - 2 December 14, 1999 ,. 5:10 p.m.
a
responding to these questions. I am not familiar with these cuts or slashes. I
was not present in any of these meetings, this Representation nonetheless.
REP. ROSALES. Well, if you don't know right now, I am sure there is a
' way of finding out, the House and the senate. I understand that there is a meeting
that has been going on since last night, a pre-Bicameral committee meeting
between the House and the Senate Members.
REP. ROXAS. Precisely, Mr. Speaker, that is why this Representation
offered to obtain a copy of the Lady's questions and to send it at the soonest
a
possible time to the senate or to the House Panel or to try and obtain the ansvrers
to these questions. But if the Lady is looking for an answer at this moment, there
is no answer that is possible. The parliamentarv inquiry referred to the
parliamentary status of the measure with respect to the substiance or the
information contained therein, this would not be within the purview of this
Representation, Mr. Speaker.
REP. ROSALES. Would we be able to get an answer within - at least
today, while the session is going on,
REP. ROXAS. At the soonest possible time. Again, the distinguished

Minority Leader, the distinguished senior Deputy Minority Leader, the Leaders of
the Minority to whom the Lady berongs, rikewise attencr this meeting.
so we will
, have a double-barrered-.*approdohffso we can ask the Representatives

of the
Minority who are Membersrofi,the Bicamerar paner.
we wiil rikewise send a copy .
' to the committee on Appropriations shfi so they may inquire

from their senate
dd
nc 4i
LEDESMA .2 D'rcember 14,1glffi 5:10 p.m.
a
counterparts. And whatever may be suggested, we will certainly prepare
to
accommodate her.
REp. ROSALES. I definitely would appreciate that. Mr. Speaker.

This
Representation woutd appreciate whatevsr immsdiate
fforts can be done both by
the Majority and ths Minority and of course, we wourd arso

rike to know the House
position regarding this, if this is all true, Mr.
Speaker.
CONSIDEMTION OF H.B NO.6814
Continuation
a
REp. ROXAS. Thank you, Mr. Speaker.
Mr. speaker, at this juncture; we

hafe arready cailed for the continuation of
consideration of Commifred,iReportrNo.
206 on House Bill No.6814, submitted by
the Committee on Banks andrF.inanoial Intermediaries.
May I move that we recognize the distinguished

Chairman of the
commiftee, the Honorabre Manong cario
Laurer, so he may continue sponsorship
of the measure. And our parliamentary

stratus, Mr. Speaker, is that we are
in the
Period of Individual Arnendments.
Mr' speaker, before the distinguished Gen'eman

from Batangas continues
his sponsorship of the measure,
may we recognize the presence in the
session
hall of a deregation from Barangay
Nazareth in cagayan de oro city,
Members of
the Lupon ng Tagaparnayapa led
by Barangay Chairman lan Mark Nacaya
and
made up of Fror Nacaya, Generosita
chavez, crarissa Navarro, Nena patriana
Flor Romarate' syrvio Tabosares,
Gerry Daomiras, Roy Navarro,
Rodrigo Busata, /:
^l'{
,1.;
LEDESMA - 2 December 14. 1999 5:10 p.m.
George Epan, Eduardo Rubic, cristita Eduave who

are awardees of the sentrong
Sigla Award...tell ', 1,'

._, ; !,_
r',? /1 {)
l.
I
CJAeuilar - 2 Decenber 14, 19St q.1q -
^
(PO - Deputy SFeaker Gullas)
EEP-- XQXAS. ljiFilir l\r{arrf and theSerLir'ctrg

Outstarrding l,upon ng Tagi.rpamal'apa of licgi on ]i. They are
preeent i n the eess:i.r:,rr l,al.L. guest,."; of the distinguished
Tlnnex Jaran.Ia. ( .41:r' 1a,r*,' )
THE DEFIITY SFEAlii,lI? 1F:':ir,'. (;tr l- l:r.,.r . r"ir,' welcc'me our
dlsilngrrl ,';1-r r,:l iq',le,o1-,e ) :i! Ii-l : "i-+.:,' ccur-tesy of
fl ,,':i-. i ' ,.,r * a .'.' aa i
our ctl=;tlngui.eltecl -o l i:: 1!iil.r. i,lre ill;:r, rr'i.ri.,lc': Constentlnc

.laraula.
IiflF. RCXAI. .l'1r
. iipr:5]',41.. t-,he r-l i. u I, i.trF'.1iEfied tlenileman
from Barangas has tire flor,r'. irilil irp ic: rpe.'lrr
J t '|Ll,J
r-n rc'r'r:nt
l-ndivlrLi,tal anrenairnir-ri F: , ii air-l' .
THE DEPIJTY SpEAIIER ( Iie1-', . Gu Ii a..s ) . T'he ilha ir Fa-i,7t1i 7pF
our dletinguished col.league f rom Bat,anq.as. onr |rardworking

Chairperson of the Cr-rmmi.ttee on Rarrhr; and Financ i a I
Intermediariee, the Honorable Mar:ario Lar-ir'e 1 IV -
SUSPENSION OF 5E53IO|]
REP. LAUREL. Thank you, Mr. Speaker.

May I ask for one mlnute suspension, Mr. Speaker.
THE DEPUTY . Gul-fas). Seeeion i.e euepended
for one mlnute . ' i.
' :;.
It waa 5:16
RESUHPTION 0F SESSI.TN
At 5:17 p.n., the Eeslion was resumeC

THE DEPUTY SPEAKER ( Rep. ijul las ) . Sessl,rn is re6umed.
Ai; 7'i
?0252
OJAgr-ril.ar -. 2 Ir,....,- .,h.-l' l rl _ i.:t' .1 5:15 p.m.
REP . LAUtiEl,. . Mr . Spe,al<er .
THE DEPUTY SPEAHER (Fep. Gultas; . D i st lngul ehed

SFoneor .
I ND ] VI DIJAL A}4EI.IDMEI.ITS
REP. LAUREL. We are now ready fof individual

amendrnenta -
THE DEPUTY SPEAKER (Rep" Gullas). Any of our

colLeaguee who wouLd wlsh to fiie their lndividual amendment
may do ao.
Speaker.
TI{E DEPUTY . Gullas). Our digtingulEhed
collea8ue, the ' , iE recognized.
REP- GUNIGUNDO.,ildi: Thank you, Mr. Speaker. Thie
Repreeentation woulC llke to propose to the clistlngulehed
Sponeor, the Gentlemanj'foom Balangae, the followine anend-
nente on Commlttee Report No. 2OB, Houee B11I No. 6914, and
they are ae foLlowe: On Sectlon TZ -..
THS DEPUTY SPEAKER (Bep. . cul_.las ) Paete, pleeee,
d16f,lngulshed col league .
REP, GUNIGUNDO. Fage ZB, line BS, change the number

1335 to 3135.
THE DEPLIIY SPEAKER . (Rep. Gullas). What does the
Sponeor eay?
REP. LAUREL. Accepted, Hr. Speaker.
Paoa 2
0c 4s
I
CJAguilar - Z Deeember 14. 1-a99 v.!v f ,ur-
THE DEPUTY SPEAKER { Rep. Gu}las ) - Is there rTct

i)bJectlon to the amendment? | Sif enc--t f ir,,- Chair heare
none; the amendment ie approved
FEP. GUNIGUNIIO . Thank you ,, your Honor .
I'Ir - Spcaker
Next amendment is on !,age 28, Sectjorr BT- Between
l1nes 12 and 13, insert the following paragraph:
ADDITIONALLY COMMA (, ) BANKS SHALL I,IAKE AVAILABLE TO
THE PUBL]C IN SUCH FORM }ND MANNER AS THE BAIiGKO SENTML MAY
PRESCRIBE THE COI',.IPLETE SET OF ITS AUTIITED FINANCIAL STATE_

MENTS A5 WELL A,5 SUCH OTIIER RELEVAI;T INFOEMATION INCLUDING
THOSE ON ENTERPRI SES I'1A.]'IRTTY_owNED {-IR coNTRoLLED BY THE
BANK COMMA (, ) THAT WIL', TFIE PI,ItsLI{j oF THE TRUE

'I,IF.ORM
FINANC]AT. C{-INP1'1'JO* !F A BANi; A;J {]F AI.IY GlVEi.{ TIME PERIOD
(.)
THE DEFUTY SPEAEER (Re';r. GuIlrs i Wiia'r, does the
Sponsor say'i
REP. i,ALIREL. Ar:,--e!terl . l-'lr'- iip-,,:r,1<.:r..
THE DEpt_tTy EpEAFiEFi ( Fel,. itrii.i ar: r Is there
. no
obiection i:c the .anren,_1meni:? (l.iJcrri::, I The Chair heare
none: the amBndment is ap1,1-,1yre1f -
REP. GUNIGUNDO. Orr !,age ZA, Seciiorr 69,

flne 30,
lnsert between the worcl ---tran6act icrrs - - and the word .rby.,
the worcle INCLUDING THOSE INVOLVII.TG LrrcAL
AND FOREIGIi
EXCHANGE. /cJa
44-//
00 .'lli
(l(';:{
Ansula- 1 Dec. 14. 1999 5:20 p.m.
REP GUNIGUNDO. ...LOCAL A}ID FOREIGN EXCHANGE.
THE DEPUTY SPEAKER (Rep. cullas). Whai does the Spons0r say?
REP. LAUREL. Accepted, Mr Speaker.

,
THE DEPUTY SPEAKER (Rep. Gullas). ls lhere any objection lo. lhe
amendment? ( S/rbf,ce ) The Chair haars none, the amendment is apprwed.
REP. GUNIGUNDQ. And finally, Mr. Speaker, Your Honor, 0n page 29,
Section 92, line 23, Insert the arlicle THE before the word ',Philippine,,.
THE DEPUTY SPEAKER (Rep. Gullar). Whal does the Sponsor saf
THE DEPUTY SPEAKER (Rep. Gullas). ls there any objection lo the
amandmenl? ( Sttsms ) The Chair hears none; lhe amendmenl is approved.
REP. GUNIGUNDO. And onlhat same page 29, line 24, Seclion 92, inserl
the punclualion mark COMMA (,) between lhe word "C0rp0rali0n'. and lhe w0rd
"as"-
THE DEPUTY SPEAI(ER (Rsp. cuilas). Vlhat do6s the Sponsor sqf
REP. I-AIJREL. Accepled; Mr. $peaksr.
THE DEPUTY SPEAKER (Rep. Gu[as). ls thera arry objsclion t0 lha
amendmsnt? ( Sr7ercr ) The Chair haars none; lho amendmenl is apprond.

REP. GUNIGUM)O. And on the same page 29, line 24, add anolher
COMMA O between tha words "liquidalor " and .shall".
THE DEPUTY SPEAKER (Rep. Gullas). What does the Sponsor salB
i1r.' il ,,
$
a Ansula - 1 Dec. 14. 1999 5:20 p.m.
REP. LAUREL. Accepled, Mr. Speaker.
THE DEPUTY SPEAKER (Rp. cullas). ts there any obleclton to ths
amsndment? ( Si&nce) The Chalr hears nons,lhe amendmenl is approved.
REP. GUNIGUNDO. Thank you very much, Mr. Speaker, Your Honor, for
accapling thc indivlduat amsmlmmts of thls humble Representation.
REP.LAUREL. Thankyou.
THE DEPUTY SPEAKER (Rep. Gullas). Thank you dislinguished colleaguc,
lhe Honorable Maglanggol Gunigundo.
REP. BUNYE. Mr. Speaker.
THE DEPUTY SPEAKER (R6p. Gullas). The Chair recognizes our
dislinguished colleague, the Honorable lgnacio Burrye.
REP. BUl.lYE. Thankyou very much, Mr. Speaker.
YUe would tike lo requesl the honorable Sponsor l0 Kindl.t c0mider lne
folloring indMdual amendmenls. lf I may proceed, Mr. Speaker?
THE DEPUTY SPEAKER (Rep. Gullas). Plea$e procasd, daetinguishad
colleague.
I REP. BUNYE. On page 4,line 29, we rsque$t thal lhe following phrair bs
inserled as follows: THE MONFTARY tsOARD MAy AUTHORIZE COMMA (,)
NOT EARLIER THAN FIVE (5) YEARS AFTER EFFECTIVITY OF THIS ACT
coMMA(,).
i
THE DEPUTY SPFAKER (Rep. Gullas). What does the $ponror ra1f;
.q
l
I
.a
l oa
J
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i.
I
I
:$
a Ansula - 1 Dec. 14. 1999 5:20 p.m.
REP. LAUREL. I am sorry, Mr. Speaker. The effecl of the amendment
wlll mean lhat thsre will be n0 banks l0 be aulhorEed l0 be 0pened for flve years
and at lhe momenl we are not prepared lo accepl lhis amendmenl.
REP. BUI,IYE. Your Hongr, we jusl would like lhe Sponsor to consider
pos$ibty a moralorium on commercial banks only itthal i$ acceptable for a period
of five yeare.
, REP. IAUREL. Mr. $peaker, may I ask for a one minule suspension.
THE DEPUTY SPEAKER (Rep. Gullas). Session is suspended for one
minuls.
/f was 5:23 p.m.
RElllJgP1161.1 OF SESsl.)N
At 5:23 p.m., flra sessrbn was rasumed.
THE DEPUfY SPFAKER (Rep. Gullas). Session is resumed.
REP. BU|,IYE. Mr. Speaker, afler conferring wilh lhe honorable Sponeor,
this Represenlation is tvithdrawing his proposed indMdual amendmenl.
THE DEPUW SPEAKER {Rop. Gu[as). Thank you diatingubhed

colleague, the Honorable lgnacio Bunye.
REP. BUNYE. So if I may proceed on lhe same page, tine 32-lt ls Just a
minor amendmenl, Mr. Sponsor aner the word ',lnlegrily,. we will Jusl pul a
-
PERIOD O and thsn ltrc subeequenl,word will be capilalized.
THE DEpUTy SPEAKER (Rep. Guilff). Whal does the Sponeor raf
REP. ["AUREL. Acceplad, i,ff.,Speaker.
na $
tl
lns*- t Dec.14, 1099 5:20 p.m.
THE DEPUTY SPEAKER (Rep. Gu[as). ts thore ainy ob]eclion lo lhe
amsrtrnErd? ( Srhrrce) ThcChair heen nonc;the amendment is approrud.
REP flJilYE. Thank you very much. On page 23
THE DEPUW SPEAI{ER (Rep. Guilae). Twenty?
REP. H.JNYE. 23.'
/ THEDEPUWSPEAT{ER(Rep. cu[as). 2i.
REP:E.JNfE. Yec.
TI{E DEPUW SPEA(ER (Rep. Gntfas). pleaoe proceed.
REP. Btf.lYE. Sectlon 7l q,ould the tlhtinguished SponEor corFldsr
dchting tlw wtrolc oocllon?
o Tha iaaron foillHr*j6quss1;*Mr., Speeker, is that I fesl that ll$ lr rn

ovrrrrE6llon'lo'tho'premltfil{|ilionp}yhlc" r ia true thal ws havo rncourtlrrd
0c 5ii
Bongulto -2 Dilrl ill\.,lliE Fr i3. 1,ntr!
(PO - Depuiy Speaker Gullas)
REP- BUNYE. ...as far as real eslate loans is concefned, the silualion
mlght tunl around some time and we d0 nol want t0 unduly tie our hands by
including lhis proLvision.
THE DEPUTY SPEAKERTi(RupSGullas). What does the Spon$or say?
REP. LAUREL. Acceptedililt'sgpeaker.
THE DEPUTY SPEAKER (Rep. Gullas) ls there any objection to the
I amendmenl? (Silence) Ihe Chair hearg none, lhe smendmenl is approved.
REP.BUNYE. Thankyou.
Finally, Mr, Speaker, jusl minor correction 0n page 26, that is line 30, lhe
senlence should read: 'Rent out safe deposit boxes" and delete all the other
words.
THE DEPUTY SPEAKER (Rep. Gullas). What does the $ponsor saf
REP. LAUREL. Accepted, Mr Speaker.
THE DEPUTY SPEAKER (Rep. Guila$). ts there any 0bjeclion t0 tne
amendmenl? (Slbnce.) The Chair hears none, the amendmenl is approved.
REP. BUNYE. That will be all, Mr. Speaker.
Thank you very much and thank you, dislinguished Sponsor
REP. LAUREL. Thankyou
THE DEPUTY SPEAKER {Rep. cuilas). Thank you, dislinguiehed

colleague, the Honorable Toting Bunye
Dislinguished Majority Leader, The Honorable Mar Roxas.
t'r
nc 5.1
' i
. l:::\-....
Bongr-rito.2 t)ll(]El,{FJEFT 1 :3, 1 9y,1
REP. ROXAS. Congratulatione, Mr. $peaker, lo the dietinguished

Ghairman of the Commiltee apparently sufficient ofr lhe fleor worked ..
lrnisspoke, Mr. Speakei fheie aie eiheis,,,,..itc wlsh t0 lfltf0duc
indMdudl amendmenls, lhe dislinguished Genlteman F0m Mi$ami.i {jfldiltat.
THE DEPUTY SPEAKER (Rep. Guttas). Session is suspended for one
minule.
l It was 5:26 o.m.
RESUMPTION OF SESSIOI{
Ht 5:27 p.m., flre sessJbfl was re.eumed.
THE DEPUTY SPEAKER {Rep. Gullas). Session is resumed.
While our dislinguished colteague from the First District of Misamis Orlentat
is flnalizing his amendment, perhaps other colleague$ may wish to presenl thelr
ittdMdual amendmenls
Tne Chair seee no hand raised.
The dlslinguished collBagueffic[rlhe First Districl of MakBil, lhe Honorable

.
Jokerfuroyo.
REP. ARROYO. We are finishing it so that lve do not have to have
discussed this. !
Thank you, Mr. Speaker.
THE DEPUTY SPEAKER (Rep. Guilas). Thank you.
$ession is suspended for one minute.
Ofi 5l;
B,rna-rll0 -: 5:j5 p.;n
It was 5:28 p N. ,4
:
,
I
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i
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;
I
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:
j
CABANOS - 2 December 14, 1999 5:35 p.m.
a
as)---
-(Po:1)ejuv-S-pEaacicn-ff
At 5:35 p.m., fhe sessrbn was resumed.
IllE reslr]ned-
QEPfTY SPE{![_(Rep. Gullas). 9ession is
Dishnguished Mqeri$fleer{eadetJhe Honerable Mar Rsxas- --

---
SIfSPENSION OFCONSIDERAT]ON OF H B NO, 68H
Mr. Speaker, after consrrlting with our distinouished Members from

)
Migamis Odgnlql as well as (from the) First District of Makati, so as to enable the
---eptletnen to pedeef their amendmentg.which are somevrhat complex after nine

---
*nths of intorpcllation and'preparation,-may-l-ask that w6'temporarily-suspend-*-
O
consideration of the measure so we may take up otner matters, and then with a
view towards returning to this said bill,
TF{tr DEPI ITY .SPEAKtrR (Rep Gullas!,Js there_lo__ohjoction ro the _
-ffi
REP. ROMS. At his'judoture, Mr. Speaker, may I move that we now
qgE'der g! Third Reading several measures which have now been distributed to
I so move, Mr. Speakei.
n i 5:--
J.80 09
1999
DECEMBER 14-16, 1999, DECEMBER 20-21,
C Clrrz. Zcnaida C Cnrz-DLrcLtt' RESLll.'l' 0t' 1'll li v()l'lNG

iuaurqco. Teodoro
biaals.n p Dilangalen' Josephirre dC DolrilrgLrez'
l-hc rcsull of thc voting was ls lbllolvs'
lo."it A". H. Drirano, Jack Eurile' Eduartro l{' I}'
rnita. Llnilio R. Espinos:r JL, \'ida \/ lrspinosa'
Darst,A FLLcntcs, Ninfh S Carin- Edrrrrrc{.' ll
(iLrllrs'
Efr"il t. H.rr.tn. Jocl' D IIizon'-lNottrrr [J llrrpcrill' Drllttgllcn
JortlLtrtr Jo::ciitt:L /\ L);lil
Constarttino C. Jaratrla Lilirart
r\ L'apLts' l)atttc Dontiugtroz
1\'1. Josorr. Sinrcon L Kintauar. Jesli
A LrA\ u
V l,iban- Mr. Victotia 1-. l6c-sill. I"nltli [l lopcz' /\ltit\ {Il DLrrnpit
AIr]TcQ f)urlno
RLry Elias C. Lopez. Jtrlita l-orcuzt'-\r'llarcri "\'"rrrc
Dutcrtc
lr4aliksi, lntcc R N'latcos' Iilger l iUcrtdttza'
.\c( \r I n
S ll ,\ d tirLtt: " Eballc
Lconarrlo Q. lllontcnravor. Autonio Flclttatrio l--cllrvulrl
NlclrLtra. Ralhcl P Narltcs' [:rnncis l- Ncpt]'tllt tt:cno' AgLrrnaldrr
('arlLrs ll Pa- Ennlc
Ernesto A Nieva, John N Olola lt"
.Alhano
dilll. Rov r\ Patlille.lr'. Arnar'lcr-r Il I'crc: lr l:riLt /\llllllrrl' Ernrita

(l Potrcr:.lt Allcrr S l,)rrirrrp'r' .\ lr rrr:z i( i t Es pina
:Lrd6 I' Pilapil. Ncstc,r (V
( )-strrr li llr'llr- \1\ ir r('; (l' l Esp inosa )
Ralph C. Recto. Ranron i\4 llct'cs' Fl jrirdo
) .'\ rtrilrr'l (\l t
gLtcz. Alfictl S llorrtLr:rlclcz ltrrrlirr l1!rlc Nl
lio-
r\ itrlitlir lli I
nrLrirldo. Roxa*. Arrrctlo (i SalLrrlo lr
\ l( 'rlL' ''\
( Fr lc:otr
[llr:rlrr' ]rl s'tr- l ,.i.lr ir ( \ I- lr, r rnlts
Sltttlot.ll- lJatticil N'l Satettrts'
)
I \'i'lL'r ttt'ltl:r (lt:l lLr' l;loircndr-t

rnicn[o. Ricardo (]. Silvclio. l)arrilr Srrrrc': '\
FortLtn0
S lrtltttltatls' ,,\ rrpil)t
R Sunrulong, I{olcx't' SLrpIco' \s;lLlr 'fttrt'lrttr' (ictt- FLrr
l{odoll'o'f .r\ril)ttittil
Rcqinaldo N.'tiluduca.
,'11111;11e (.'\ Fucntcbglh
cro"so DC. 1'ttlagall- Viccrrti'Y ir Vllcrl
[:]t'ln;tl(rl )
(Ii Ltentcs
Romualclo T Viccncio' F:drth V Villa- Atlrrr rro I F
M. V."gurn. Crrcia (E.)
B. Villar Jr nrrd Lattrcrlcir I] Wrc-
"Mr,'t,,"1 lJirciirll
nr'"u^- Carcia (M.)
lJri lc IIes
r1iIr1g.
Lli n lr;r!.: Cltttr
l:lurl,cts C o lcz-
' REN4A RKS OF RI'P. TTOXAS Conznlcs (N )
[3] t irtltg..r
Conzxlcs (ll.F.)
Thcretrpon. Rcp Roxas shted thxt hc lta; ttt ltLs
ll:tsctrg
No t'll l4 as Colzaloz (J )
uosscssiorl it lettcr ccrtifvirlg HoLrse Bjll
l lJatcrt n:t
(2) of tlre Conzalcz (R M.)
turgcnt. pLlrsuant to Arttclc Vl. Section 26
1
LJclttlr'rn1c
I Bcratio C-ordon
Constitutioll.
I
Bucstr GLrllas
,t
B lut CunigLrndo
I In victv thcrcof, thc Body procecded t(' thc ap- Lr
Hcrrera (Efren T.)

i proval ofFlorrsc Bill No 68 l4 on Thrrd Readrng BLrnvc
Cagas Hcrrcra ( Erncsto F.)
- APPROVAL ON llIIRD READING Calalav Hofer
I lnrpcflAl
5
OF.HOUSE BILL NO. 68I4 Ca ld cron
(lalinrbas-V rlrarosa lpong
I
I
On rlotion of Rep. Roxas, tbere being no oblec- Candazo .lltl tlt
t tion- thc Bodv procceded to thc approval on Tllird Clapp lcnrart Jlta
ulaLrla
;
Rcadirrg ol f.lorrsc Bill No. (rti l4 llursttant to Scction Carloto J
fl a)'ctr nc] .loaqLrin

l 2ti(2). Article Vl of tlre Constitrrtron.
I
Cc ri lLcs Joson
i
i Upon direction of the Chair, the Sccrctlry Cc'rl- C hipcco Kintanat
cral read the titlc of the House Brll No. 68 l4 to r'vit: fiojuangco Lapus
i
C osn len Ltrn
i ,AN ACT PROVIDING FOR 'I'HE RIE.CIJI-A- CrLrz (B ) Laurcl
!
-IION OF THE ORGANIZATION ANI) Cnrz(f) Ledesnta
l
OPERAI'IONS OF BANI(S, QUASI- CrLrz-l)ucrrl l-cvistc
BANI(S AND TRUST ENTTTI'IIS." C Lta l- iban
Crtcnco Libnuan
1 -fhc Chair dircctcd thc Sccretan, Curcrrl to call Dcl lrl ar Libarios
I the Roll tbr nonrinal votittg l'hcreafter, ptrrsuant to

tlre l{u lcs of thc liorrse, a sccond Roll Call r.r'as nradc.
De q u iira
Diaz
Lirrr
Lobrcglt
JO DECEI\,IBER'14-16. 1eee, DECEMBER 20-21, 1999
LocsLlr Rcycs (R.) DBSIGNATION OF CONFEREES T0

Lopez (E.) Rodrigucz ) (1. THE CONITERDN(]E COMMITTEE ON
Lopez (R.) Rodrigucz (0.) HOUSE BILL NO. f,]74 AND ITS
Loreozo-Villarcal Rorrtrralde z ST]NA1'[ CO I i NTIiI?PART
Lorelo-Co Rorrrraldo
Lozada Rosaies On nrolion ol'Rcp. Roxas. drerc being llo obicc-
Mlcitfilrtrbon Roxls tion. the Lloclv desrguttcd the following lvlcmbcrs ls
Macias Sa hpuddr n llorrsc cont'erc,:s to tlrc Bicamcral Confbrcncc Conr-
I\'l agtLrbo S a lr trlo nrittci: on Ilrrrrse llill \o 1{374: Rcps. Carcia (M.).
Maliksr Sandor,al (lr ) .^\ngclrti-. \'l SrTnr|Cnto. Cclso L. Lobrcgaf. Nilrciso
Nlangot:rra Sando\al (\r.) lf \1o1rti-,f1. L:nrilro ll. Espinosa Jr. und Victor ll.
l\{araiion Sarenas Srniu l,,rl
Marcos Sarnriento (r\ )
Marturez Sarnliento (ll ) B t ts tNtiss trott fr{II l)AY:
Mendoza Scachorr COlil\rI'rTEla r{ri'PORT NO. 521

Morfort Sr los oN Ot jst,_ BII r, N0.8879
Montemayol S ilr,erio
N{ontilLa S ingsr,tt llr:ll Roxas, there being no obigc-
()rr lr'r1ir,l ,r1
lvloreno Su:ttcz tiorr. 1hc HrrLIr'..irr!rd::rfd on Second Reading Housc
) Nachura Srrrrulorul llill No l.i1{7Q irs,-nrl) )ilied irr Comrnittee Report No.
Nu ntes S L r1r lit:r r ilI 1p1l rt:lrrrl,.rl orrl ll, lhe Comnrittcc on Covgrn-
Nlvalro Sr'- Allrtr url,r IrellL {: nl']r lr r i':( 't u ntl l'' rvlrtization.
-l
Nrpomrrccnc, enrntlitg
Nrcva 'fcod,:'ro l. pol '1ir', 1r,,'r ol tlr,: Chair. thc Suclctarv Ccn-
0rola 'l'cvcs 1;l .lfl 1lr 'rtl ,,i | '.. llill. to \.vit
0rtega l'ilanduca
Osabel TLtazorr ..\N ,\('-I- [\'I'UNDINC THE TERM OF TIJE
Padilla (C ) lirlagart (10\'lNlt'l'fE11 ON PRIVATIZATION AND
Padilla (R.) Undc I'IIE ASSI-,f PRIVATIZATION TRUST.
Palnra Gil Valcr ir ,\l\i LlNi)lNC-i FOR TliE PURPOSE RE-
Paras Vc ios o I'IIBI-IC,,\CT NO 7I1II. AS AMENDED."
Parcon Vercclcs
Pcrcz \/r- rgala {r of tlrc Iiill hed becn distriblrtcd to lhc
(1,1')rr.,
Pichay Vice ncio N.'[r:nrbcls. ()r] nrotron o1'llcp. ILox:rs. thorc troing tttr
PilapiJ Villanueva objection. tlre Bodl dispcnscd with tho rcirding of thc
Planrcras Villar tcxt ofthe nreasLrre r.vrthout prciudicc to its insc(iol1
Ponce Wacnarg into dre Record of thc Housc,
Punzala.n Yapha
Quirrlpo Young SLrbsequcntly. ou motion of Rcp, Roxas. thcrc
Ramiro ZarIiga. bejng no objection. the Chair recognized Rep, Ri-
Rccto Zrbiri cardo C. Silverio to sponsor the Bill,
Rcycs (E )
SPONSORSHIP SPI.]ECH OF REP. SILVERIO
A.qdin\'l:
Rcp. Silvcrio rnitrallv pointed oLtt that HoLlsc lJill
AJvarez (H ) DatLtntanong No tltt79 is a sltlrslitLrle treasurc to Housc Bill No,
Apostol De fcnsor 7j2(r which proposcs to extcnd thc lit'c of thc Com-
Arroy6 lnlrtcc on PrivatizatioLr (COP) and the fusct Prrvarr-
zal.ion Tnrst (APT) tbr a ternr ol foLir vcars. lt h:r-s
Ahs len ti( 11 been ccrtificrl as urgenl b), President Joseph E Es-
trada, he sard_ to address the pLrblic ontergeltcv
caused bv tinrO conslt:ailltsl fil]d additional rcvcDucs
Nor.rc tbr privatlzation: rrrdLLce govenlmenr cxpcndttrtrcsi
and to lllcct tllc incrcxsulg demand tbr sutlicisnt arrd
With IU5 rlfinlativc votcs. fivc negative vote:; inrrnediatc dcirvcrv of vital goods nrrd scrviccs. llu
and no abstcntiou. thc Body approvcd on 'fhird statOd that thc llill Iirrlhcr propos0s to cxrcncl tlt0
Rcading HoLrse Bill No. (rlJ 14.
Irf-c ot' tho COP lnd thc ApT tiorn JanrHn, L

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wi {}t t.tpr:n he 1: :i tirr.r,rn c:cl ,, ,, .,

f,HnIftFlAN ROCB { l:--rn liir'-:'it:! I .- , r:isi-iance? Where did v*e

get this Planetary Fo*rd t' s an independent

thcught, As i,io;-Ced. i4e acceptei thiE lest tifie pero bakit

f,HA:F'F?+lj ! ii! !i-:.:': " j -:.-,' . r: r:-+ latin Eng House?

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FflCn. E;r;Etrt_ +-irt ire refer to Section 36,

Faano ba itB? Ahn lre ril;.de ih:.: Lr;-oader. "Failure or

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CHA IFl.lAl.J RICS . g:: .

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I ahen t |{e wantr tt: prohibi t ihe i i reqs:i..g of new banks.

cc}mfiercia 1- tblishEC i.i:thin ofle year. " Ba.

CHAIRf,'AN LAUREL. D;;an =a v_=.s1,3.-i iiatifl , Bca, pal agay

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CHAlRI'lffl.l LAURET , Huu:.E n+ ;:=iii;5 i_=Iassify universai

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trapital regLriremrnt= shall :ie prr=cribt:s'. etcetera...,l

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