MONETARY M4B

• SECTION 68. Means of Action. — In order to achieve the primary objective of price stability, the Monetary

  Board shall rely on its moral influence and the powers granted to it under this Act for the management of

  monetary aggregates.
• SECTION 69. Purchases and Sales of Gold. — The Bangko Sentral may buy and sell gold in any form,

  subject to such regulations as the Monetary Board may issue.
• Purchases and Sales of Foreign Exchange


  The Bangko Sentral may buy and sell foreign notes and coins, and documents and instruments of types customarily employed for the international transfer of funds
• Entities or persons the Bangko Sentral may engage in foreign exchange transactions with

  • Banking institutions operating in the Philippines
  • The Government, its political subdivisions and instrumentalities
  • Foreign or international financial institutions
  • Foreign governments and their instrumentalities
  • Other entities or persons which the Monetary Board is hereby empowered to authorize as foreign exchange dealers, subject to such rules and regulations as the Monetary Board shall prescribe
• SECTION 81. Guiding Principles. — The rediscounts, discounts, loans and advances which the Bangko

  Sentral is authorized to extend to banking institutions, under the provisions of the present article of this

  Act shall be used to influence the volume of credit consistent with the objective of price stability and

  maintenance of financial stability.
• SECTION 82. Authorized Types of Operations. — Subject to the principle stated in the preceding section

  of this Act, the Bangko Sentral may normally and regularly carry on the following credit operations with

  banking institutions operating in the Philippines
• (b) Production credits.—The Bangko Sentral may rediscount,discount,buy and sell bills, acceptances,

  promissory notes and other credit instruments having maturities of not more than three hundred sixty

  (360) days from the date of their rediscount, discount or acquisition by the Bangko Sentral and resulting

  from transactions related to the production or processing of agricultural, animal, mineral, or industrial

  products.
• Commercial credits

  1. Bangko Sentral may rediscount, discount, buy and sell bills, acceptances, promissory notes and other credit instruments

  2. With maturities of not more than one hundred eighty (180) days

  3. Resulting from transactions related to:
• Transactions related to commercial credits

  • Importation, exportation, purchase or sale of readily saleable goods and products
  • Transportation of readily saleable goods and products within the Philippines
  • Storing of non-perishable goods and products which are duly insured and deposited, under conditions assuring their preservation, in authorized bonded warehouses or in other places approved by the Monetary Board
• (c) Other credits. — Special credit instruments not otherwise rediscountable under the immediately

  preceding subsections (a) and (b) may be eligible for rediscounting in accordance with rules and

  regulations which the Bangko Sentral shall prescribe. Whenever necessary, the Bangko Sentral shall

  provide funds from non-inflationary sources: Provided, however, That the Monetary Board shall prescribe

  additional safeguards for disbursing these funds
• Advances by Bangko Sentral

  1. Against gold coins or bullion

  2. Against securities representing obligations of Bangko Sentral or other domestic institutions of recognized solvency

  3. Against credit instruments referred to in subsection (a)

  4. Against credit instruments referred to in subsection (b), for periods not exceeding 360 days

  5. Against utilized portions of advances in current amount covered by regular overdraft agreements related to operations included under subsections (a) and (b), certified as to amount and liquidity by the institution soliciting the advance

  6. Against negotiable treasury bills, certificates of indebtedness, notes and other negotiable obligations of the Government maturing within 3 years from the date of the advance
• Advances by Bangko Sentral

  • Fixed periods not exceeding 180 days, except for advances against collateral named in clause (4)
• (7) negotiable bonds issued by the Government of the Philippines, by Philippine provincial, city or

  municipal governments, or by any Philippine Government instrumentality, and having maturities of not

  more than ten (10) years from the date of advance
• SECTION 88. Other requirements. — The Monetary Board may prescribe, within the general powers

  granted to it under this Act, additional conditions which borrowing institutions must satisfy in order to have

  access to the credit of the Bangko Sentral. These conditions may refer to the rates of interest charged by

  the banks, to the purposes for which their loans in general are destined, and to any other clearly definable

  aspect of the credit policy of the bank.
• SECTION 88-A. Exemption of Collaterals from Attachments, Executions and Other Restrictions. —

  Collaterals on loans and advances granted by the Bangko Sentral, whether or not the interest of

  the Bangko Sentral is registered, shall not be subject to attachment, execution or any other court

  process or administrative restrictions on land use, nor shall they be included in the property of

  insolvent persons or institutions.
• SECTION 88-B. Deputization of Legal Staff in Case of Foreclosures. — In case of an extrajudicial

  foreclosure of mortgage in connection with loans and advances under this article, the Bangko

  Sentral may deputize any of its lawyers to conduct the public auction pursuant to Act No. 3135,

  as amended.
• SECTION 88-C. Right of Redemption of Foreclosed Real Property; Right of Possession During

  Redemption Period. — In the event of foreclosure, whether judicially or extrajudicially, the

  mortgagor, who is a natural person, shall have the right to redeem the property within one (1) year

  from the date of foreclosure sale. In case the mortgagor is a juridical person, the mortgagor shall

  have the right to redeem the property sold in a judicial foreclosure sale within one (1) year from

  the date of foreclosure sale
• SECTION 88-D. Unsecured Bangko Sentral Claims. — All unsecured claims of the Bangko

  Sentral shall be considered preferred credits similar to taxes due to the National Government in

  the order of preference under Article 2244 of the new Civil Code.
• SECTION 89-A. Financial Facilities for Islamic Banks. — The Bangko Sentral may, taking into

  consideration the peculiar characteristics of islamic banking, formulate rules and regulations for

  the extension of financial facilities to islamic banks: Provided, That such exposures shall be

  properly secured
• SECTION 89-B. Loans to the Philippine Deposit Insurance Corporation (PDIC). — The Bangko

  Sentral, pursuant to its mandate of maintaining financial stability, may lend funds to the PDIC for

  insurance purposes and in cases of financial assistance that the latter is authorized to extend

  under Section 22(e) of Republic Act No. 3591, as amended. Notwithstanding Section 23 of

  Republic Act No. 3591, as amended, the Monetary Board shall prescribe interest rates and such

  other terms and conditions of the loan.
• SECTION 93. Review of the Bangko Sentral’s Portfolio. — At least once every month the Monetary Board

  shall review the portfolio of the Bangko Sentral in relation to its future credit policy.
• SECTION 94. Reserve Requirements. — In order to control the volume of money created by the credit

  operations of the banking system, all banks operating in the Philippines shall be required to maintain

  reserves against their deposit liabilities.The required reserves of each bank shall be proportional to the

  volume of its deposit liabilities and shall ordinarily take the form of a deposit in the Bangko Sentral.

  Reserve requirements shall be applied to all banks of the same category uniformly and without

  discrimination.
• SECTION 101. Reserve Deficiencies. — Whenever the reserve position of any bank or quasi-bank,

  computed in the manner specified in the preceding section of this Act, is below the required minimum, the

  bank or quasi-bank shall pay the Bangko Sentral monetary penalty as may be prescribed by the

  Monetary Board: shall be required to pay the penalty in accordance with the mechanism approved by the Monetary Board.
• SECTION 108. Minimum Capital Ratios. — The Monetary Board may prescribe minimum risk-based

  capital adequacy ratios based on internationally accepted standards and may alter said ratios

  whenever it deems necessary. In the exercise of its authority under this section, the Monetary

  Board may require banks to hold capital beyond the minimum requirements commensurate to

  their risk profile.
• SECTION 109. Coordination of Credit Policies. — Government-owned corporations which perform

  banking or credit functions shall coordinate their general credit policies with those of the Monetary Board.