BANKING LAWS

BANKING LAWS
The New Central Bank Act
(R.A. No. 7653)

General Banking Law of 2000

(R.A. No. 8791)
The New Central Bank Act
(R.A. No. 7653)
Signed into law on June 14, 1993.
Took effect on July 3, 1993
State Policies and Creation of the Bangko Sentral ng Pilipinas (BSP)
The Bangko Sentral ng Pilipinas (BSP) is the State’s Central Monetary
Authority mandated in the 1987 Philippine Constitution, which shall function
and operate as an independent and accountable body corporate in the
discharge of its mandated responsibilities concerning money, banking and
credit.
Responsibility and Primary Objective
Primary Objectives:
a. To maintain price stability conducive to a balanced and sustainable growth
of the economy;
b. To promote and maintain the monetary stability and convertibility of the
peso;
c. To provide policy directions in areas of money, banking and credit, with
supervision over operations of banks and with regulatory powers over
operations of finance companies, and non-bank financial institutions
performing quasi- banking functions.
Roles of BSP:
Banker of Government
• The Act as a banker of the Government, its political subdivisions and
instrumentalities, and their cash balances should be deposited to the BSP, with
only minimum working balances to be held by government-owned banks, and
such other banks incorporated in the Philippines as the Monetary Board may
prescribe.
• Representation with the International Monetary Board
• To represent Government in all dealings, negotiations and transactions with the
IMF, and shall carry such accounts as may result from the Philippine membership
in or operations with the said Fund.
• Representation with Other Financial Institutions
• May represent the Government in dealings, negotiations or transactions with the
World Bank and with other foreign or international financial institutions or
agencies.
• Fiscal Operations
• Shall open a general cash account for the Treasurer of the Philippines, in which
the liquid funds of the Government shall be deposited, and with transfer of funds
to be made only upon the order of the Philippine Treasurer (Villanueva, 2009).
Other Basic Functions of BSP:
• It shall have the sole power and authority to issue currency within
the territory of the Republic of the Philippines;
• The power to issue regulations to prevent the circulation of foreign
currencies, or currency substitutes as well as the reproduction of
facsimiles of BSP notes;
• It has the power to investigate, make arrests, conduct searches and
seizure for the purpose of maintaining the integrity of the currency;
• To engage in foreign engage transactions in order to maintain price
stability;
• To make rediscounts, discounts, loans and advances to banking
and other financial institutions to influence the volume of credit
consistent with the objectives of price stability;
• To engage in open market operations--- purchase and sale of
securities ---exclusively in accordance with its objectives of
achieving price stability;
• To engage in marketing and stabilization of securities for the
account of the government;
• To act as the financial advisor of the government; (Sundiang,
2006)
Monetary Board---Powers and Functions
Corporate Powers
• The BSP is a government owned and controlled corporation that is invested
by law with corporate powers. The corporate powers specified in Section 5
of the New Central Bank Act are as follows:
• The power to adopt, alter and use a corporate seal which shall be judicially
noticed;
• To enter into contracts;
• To lease or own real and personal property;
• To sell or otherwise dispose of its real and
• personal property;
To sue and be sued;
To perform any and all things that may be necessary
or proper to carry out the purposes of the New
Central Bank Act;
• To compromise, condone or release, in whole or in
part, any claim of or settled liability (Sundiang,
2006).
The BSP powers and functions are exercised by the
Monetary Board.
Composition of the Monetary Board:
There are 7 members who are appointed by the President
of the Republic of the Philippines. They are only appointed
once.
Governor, as Chairman;
A member of the Cabinet designated by the President of
the Philippines;
Five (5) members who shall come from the sector, all of
whom shall serve full-time.
Term: 6 years
The BSP Monetary Board

Chairman Nestor A. Espenilla, Jr.

Members Antonio S. Abacan, Jr.

Valentin A. Araneta
Carlos G. Dominguez III
Peter B. Favila

Felipe M. Medalla

Juan De Zuñiga, Jr.

Grounds for Removal of a Member of the Board:
The President may remove any member of the Board for any of the
following reasons:
• Subsequent disqualification
• Physical or mental incapacity that he cannot properly discharge his duties
and responsibilities and such incapacity has lasted for more than 6
months.
• Guilty of acts or operations which are of fraudulent or illegal character or
which are manifestly opposed to the aims and interests of the BSP;
• No longer possessing qualifications specified in the Act.
Qualifications of the Members of the Board:
• Must be a natural-born citizens of the Philippines;
• At least 35 years of age with the exception of the Governor,
• who should at least be 40 years of age;
• Of good moral character, of unquestionable integrity, of
• known probity and patriotism.
• With recognized competence in social and economic disciplines.
The major functions of the Monetary Board include the power to
1. Issue rules and regulations it considers necessary for the effective
discharge of the responsibilities and exercise of the powers vested in it;

2. Direct the management, operations, and administration of Bangko

Sentral, organize its personnel and issue such rules and regulations as it
may deem necessary or desirable for this purpose;
3. Establish a human resource management system which governs the
selection, hiring, appointment, transfer, promotion, or dismissal of all
personnel;

4. Adopt an annual budget for and authorize such expenditures by Bangko

Sentral as are in the interest of the effective administration and operations
of Bangko Sentral in accordance with applicable laws and regulations; and
5. Indemnify its members and other officials of Bangko Sentral, including
personnel of the departments performing supervision and examination
functions, against all costs and expenses reasonably incurred by such
persons in connection with any civil or criminal action, suit or proceeding,
to which any of them may be made a party by reason of the performance of
his functions or duties, unless such members or other officials is found to
be liable for negligence or misconduct.
The Governor’s Powers and Duties as a Chief Executive Officer:
• The Governor is the chief executive officer of BSP and is required to
direct and supervise the operations and internal administration of BSP.
Specifically, the Governor:
• prepares the agenda for the meetings of the Monetary Board and
submits policy recommendations for consideration of the Board;
• executes and administers policies and measures approved by the
Monetary Board;
• appoints and fixes the remunerations and other emoluments of
personnel, as well as imposes disciplinary measures upon personnel of
the Bangko Sentral;
• renders opinions, decisions, or rulings, which shall be final and
executory until reversed or modified by the Monetary Board, on
matters regarding application or enforcement of laws pertaining to
institutions supervised by the BSP and laws pertaining to quasi- banks,
as well as regulations, policies or instructions issued by the Monetary
Board, and the implementation thereof; and
• Exercises such other powers as may be vested in him by the Monetary
Board.
• Serves as the principal representative of the Monetary Board and of
the BSP. As such, the Governor is empowered to:
• Represent the Monetary Board and the BSP in all dealings with other
offices, agencies and instrumentalities of the Government and all other
persons or entities, public or private, whether domestic, foreign or
international; and
• Sign contracts entered into by the BSP, notes and securities issued by
the BSP, all reports, balance sheets, profit and loss statements,
correspondence and other documents of the BSP.
Responsibility and liability of the members of the Monetary Board
a. Members of the Monetary Board, officials, examiners, and
employees of the Bangko Sentral who willfully violate RA 7653 or who are
guilty of negligence, abuses or acts of malfeasance or misfeasance or fail to
exercise extraordinary diligence in the performance of his duties shall be held
liable for any loss or injury suffered by the Bangko Sentral or other banking
institutions as a result of such violation, negligence, abuse, malfeasance,
misfeasance or failure to exercise extraordinary diligence.
Outside interests of the Governor and the full-time members of the Board
• The Governor of the Bangko Sentral and the full-time members of the Board
shall limit their professional activities to those pertaining directly to their
positions with the Bangko Sentral.
• They may not accept any other employment, whether public or private,
remunerated or ad honorem
Similar responsibility shall apply to members, officers and employees of
the Bangko Sentral for;
• The disclosure of any information of a confidential nature, or any information on
the discussions or resolutions of the Monetary Board, or about the confidential
operations of the Bangko Sentral, unless the disclosure is in connection with the
performance of official functions with the Bangko Sentral, or is with prior
authorizaytion of the Monetary Board or the Governor; or
• The use of such information for personal gain or to the detriment of the
Government, the Bangko Sentral or third parties.
• However, any data or information required to be submitted to the
President and/or Congress, or to be published under the provisions of
RA 7653 shall not be considered confidential.
• Exceptions:
• Positions in eleemosynary, civic, cultural or religious
organizations
• Whenever, by designation of the President, the Governor or
the full-time member is tasked to represent the interest of
the Government or other government agencies in matters
connected with or affecting the economy or the financial
system of the country
Prohibitions on personnel of the Bangko Sentral
• In addition to the prohibitions found in RA 3019 and 6713, personnel of
the Bangko Sentral are hereby prohibited from:
• Being an officer, director, lawyer or agent, employee,
• consultant or stockholder, directly or indirectly, of any institution
subject to supervision or examination by the Bangko Sentral, except
non-stock savings and loan associations and provident funds organized
exclusively for employees of the Bangko Sentral, and except as
otherwise provided in RA 7653;
• Directly or indirectly requesting or receiving any gift, present or
pecuniary or material benefit for himself or another, from any
institution subject to supervision or examination by the Bangko Sentral;
• Revealing in any manner, except upon orders of the court, the Congress
or any government office or agency authorized by law, or under such
conditions as may be prescribed by the Monetary Board, information
relating to the condition or business of any such institution. This
prohibition shall not apply to the giving of information to the Monetary
Board or the Governor of the Bangko Sentral, or to any person
authorized by either of them, in writing, to receive such information;
and
• Borrowing from any institution subject to supervision or examination
by the Bangko Sentral unless said borrowings are adequately secured,
fully disclosed to the Monetary Boar, and shall be subject to such
further rules and regulations as the Monetary Board may prescribe.
The BSP's Organizational Structure
as of 23 January 2017

Executive Management Services– a collective term for all departments/offices directly reporting to the
Monetary Board or to the Governor
•Functional Sectors
• Monetary Stability Sector- mainly responsible for the operations/activities related to monetary policy
formulation and implementation
• Supervision and Examination Sector– mainly responsible for the regulation of banks and other
BSP-supervised financial institutions
• Resource Management Sector– mainly responsible for the management of human, financial, and
physical resources of the Bank
• Security Plant Complex– responsible for the production of Philippine currency, security documents,
and commemorative medals and medallions
HOW BSP HANDLE BANKS IN DISTRESS
A. CONSERVATORSHIP
-a bank or quasi-bank is
1. in a state of continuing inability or
2. unwillingness to maintain a condition of liquidity
deemed adequate to protect the interest of depositors
and creditors
Action of the Monetary Board
• The Monetary Board may appoint a conservator (who shall be
competent and knowledgeable in bank operations and management)
for a period not exceeding 1 year
i. take charge of the assets, liabilities and management of the bank or
quasi-bank in question
ii. reorganize the management thereof
iii. collect all monies and debts due and
iv. exercise all powers necessary to restore its viability, including the
power to overrule or revoke the actions of the previous management
and board of directors
Termination of Conservatorship
(a) When MB is satisfied that the institution can continue to operate on
its own and the conservatorship is no longer necessary; or
(b) When MB determines that the continuance in business of the
institution would involve probable loss to its depositors or creditors, in
which case proceedings for receivership and liquidation shall be pursued.
CLOSURE
-prohibit a bank or quasi-bank from doing business in the Philippines

Grounds for Closure

a) Unable to pay its liabilities as they become due in the
ordinary course of business (cash flow test)
BUT: shall not include inability to pay caused by extraordinary demands
induced by financial panic in the banking community.
(b) Insufficient realizable assets to meet its liabilities (balance sheet test)
(c) Cannot continue in business without involving probable losses to its
depositors and creditors
(d) Willfully violated a cease and desist order under Sec. 37 (administrative
sanctions) that has become final and involves acts or transactions which
amount to fraud or dissipation of assets
(e) Notifies the BSP or publicly announces a bank holiday
(f) Suspends the payment of its deposit liabilities continuously for more than
30 days
(g) Persists in conducting its business in an unsafe or unsound manner
This may be done summarily and without need of prior hearing.
Note that during conservatorship, no claims can be paid.
RECEIVERSHIP
• Who are Receivers?
• (a) For Banks –PDIC
(b) For Quasi-Banks – Any person of recognized competence in banking or
finance
Functions of Receiver
(a) Immediately gather and take charge of all the assets and liabilities of the
institution, administer the same for the benefit of its creditors e.g. Collect
pre-existing debts
(b) Foreclose mortgages security
(c) Exercise the general powers of a receiver
(d) Determine as soon as possible, but not late than 90 days from takeover,
whether the institution can be rehabilitated or otherwise placed in such a
condition so that it may be permitted to resume business with safety to its
depositors and creditors, and the general public.
BUT: any determination for resumption of business shall be
subject to the prior approval of the Monetary Board.
If the receiver determines that the institution cannot be
rehabilitated or permitted to resume business, then the MB
shall notify in writing the board of directors of the institution of
its findings and direct the receiver to proceed with the
liquidation of the institution.
Appointment of a receiver operates to suspend the authority of
a bank and its directors and officers over its properties and
effects, such authority being reposed in the receiver, and in this
respect, the receivership is equivalent to an injunction to
restrain the bank officer from intermeddling with the property
of the bank in any way;
LIQUIDATION
-from the determination of receiver if institution cannot be
rehabilitated or permitted to resume business.
Duties of the Receiver/Liquidator
(1) File ex parted with the RTC a petition for assistance in the liquidation
of the institution pursuant to a liquidation plan adopted by the PDIC for
banks, and by MB for quasi-banks
(2) Upon motion by receiver, upon RTC’s acquisition of jurisdiction, RTC
shall assist enforcement of the individual liabilities of the stockholders,
directors, and officers and decide on other issues as may be material to
the liquidation plan adopted
(3) Receiver shall convert the assets to money and proceeds shall be
applied in paying the debts of the institution in accordance with rules on
concurrence and preference of credit
(4) Receiver shall institute such actions as may be necessary
The assets under receivership or liquidation deemed in custodia legis, in the
hands of the receiver and shall be exempt from any order of garnishment, levy,
attachment or execution
Phases of Liquidation Proceeding
(Pacific Banking vs. CA, GR 109373, March 20, 1995)

First: Approval and disapproval of claims

(a) all money claims against the bank are required to be filed with the
liquidation court
(b) phase may end with the declaration by the court whether claim is with
basis or not; if with basis, classified whether ordinary or preferred
(c) order by court is final and may be appealed by the party aggrieved

Second: Approval by the court of the distribution plan prepared by the duly
appointed liquidator
(a) order disposes of the issue of how much property is available for disposal
(b) payment of all allowed claims
DISTINGUISH BETWEEN LIQUIDATION AND REHABILITATION
Sec. 29 of the Central Bank Act does not contemplate prior notice and hearing before a bank
is placed under receivership. It is enough that such action is made the subject of a
subsequent judicial review. The “Close now and hear later” scheme under the Act is for the
purpose of protecting the depositors, creditors, stockholders and the general public.
(Central Bank vs. CA, 220 SCRA 536)

LIQUIDATION
Is a winding up of settling with creditors
and debtors. It is the winding up of a
corporation so that assets are distributed
to those entitled to receive them. It is the
process of reducing assets to cash,
discharging liabilities and dividing surplus
or loss.
REHABILITATION
Connotes a reopening or reorganization. It
contemplates a continuance of corporate
life and activities in an effort to restore
and reinstate the
corporation to its former position of
successful operation and solvency.
Effects of Liquidation of a Bank or a Quasi-Bank
(a) After payment of the cost of the proceedings, including reasonable
expenses and fees of the receiver to be allowed by the court, the receiver
shall pay the debts of such institution, under order of the court, in
accordance with the rules on concurrence and preference of credit as
provided in the Civil Code. (Sec. 31)
(b) All revenues and earnings realized by the receiver in winding up the
affairs and administering the assets of any bank or quasi-bank within the
purview of this Act shall be used to pay the costs, fees and expenses
mentioned in the preceding section, salaries of such personnel whose
employment is rendered necessary in the discharge of the liquidation
together with the other additional expenses caused thereby. (Sec.3)
The balance of revenues and earnings, after the payment of all said expenses,
shall form part of the assets available for payment of creditors.
A liquidation proceeding is a single proceeding.
Although the claims are litigated in the same proceeding, the treatment is
individual. And the Order issued relative to a particular claim applies only to
said claim, leaving the other claims unaffected, as each claim is considered
separate and distinct from the others.
The exclusive jurisdiction of the liquidation courts pertains only to the
adjudication of claims against the bank, and does not cover the reverse
situation where it is the bank which files a claim against another person.
(Manalo vs. CA, 366 SCRA 752)
The actions of the MB under Sec. 29 (appointing a conservator) and Sec. 30
(closing a bank) are final and executory and may not be restrained or set aside
by a court
EXCEPT:
on petition for certiorari on the ground of excess of jurisdiction or with
grave abuse of discretion filed by stockholders of record representing the
majority of the capital stock within 10 days from receipt by the BOD of the
institution of the order directing conservatorship, receivership or
liquidation.
Note that the twin requirement of majority of stockholders and filing
within 10 days should be observed or else action will be dismissed.

A bank ordered closed by the MB retains its juridical personality which can
sue or be sued through its liquidator.
HOW THE BSP HANDLES EXCHANGE CRISIS
A.LEGAL TENDER POWER – when the currency is offered
in payment of a debt, public or private, the same must be
accepted.
All notes and coins issued by the Bangko Sentral shall be
fully guaranteed by the Government of the Republic of
the Philippines and shall be legal tender in the Philippines
for all debts, both public and private.
However: unless otherwise fixed by the Monetary Board, coins shall
be legal tender in amountsnot exceeding Fifty pesos P50 for
denominations of 25 centavos and above, andin amounts not
exceeding P20 for denominations of 10 centavos or less. (Sec. 52)

Philippine currency notes have no limit to their legal tender power.

Pursuant to BSP Circular No. 537, Series of 2006, coins in
denomination of1-, 5- and 10-piso shall be legal tender in amounts
not exceeding P1,000 while1-, 5- and 10- and 25-sentimo shall be
legal tender in amounts not exceeding P100
RATE OF EXCHANGE – The MB shall determine the exchange rate policy of the
country to ensure orderly conditions in the marketBSP maintains a floating
exchange rate system. Exchange rates are determined on the basis of supply and
demand in the foreign exchange market.

EMERGENCY RESTRICTIONS ON EXCHANGE OPERATIONS: To give MB and the

Government time in which to forestall, combat or overcome such crisis or
emergency, MB with concurrence of at least 5 of its members and with the
approval of the President may:
(a) temporarily suspend or restrict sales of exchange by BSP
(b) ( subject all transactions in gold and foreign exchange to license by the BSP; and
(c) may require that any foreign exc)ange obtained by any person residing or
entity operating in the Philippines be delivered to the BSP or to any bank or
agent designated by the BSP.
HOWEVER: foreign currency deposit made under FCDU (Foreign currency deposit
unit" Law shall be exempt from these requirements.
SECTION 105. The Monetary Board may at any time
prescribe minimum cash margins for the opening of letters
of credit, and may relate the size of required margin to the
nature of the transaction to be financed.
SECTION 106. In order to promote the liquidity and solvency of the
banking system, the Monetary Board may issue such regulations as it may
deem necessary with respect to the maximum permissible maturities of
the loans and investments which the banks may make, and the kind and
amount of security to be required against various types of credit
operations of the banks.
DEMAND DEPOSITS – this term refers to all those liabilities of the BSP and
of other banks, which are denominated in Philippine currency, and are
subject to payment in legal tender upon demand by the presentation of
checks (Sec. 58). Only banks duly authorized may accept funds, or create
liabilities payable in pesos upon demand by presentation of checks, and
such operations shall be subject to the control of the Monetary Board.
LEGAL CHARACTER OF CHECKS – the checks representing demand
deposits do not have legal tender power, and their acceptance in the
payment of debts; both public and private, is at the option of the creditor.
However, a check which has been cleared and credited to the account of
the creditor, shall be equivalent to a delivery to the creditor of cash in an
amount equal to the amount credited to his account. (Sec.60)
GENERAL BANKING LAW
OF 2000 (R.A. NO. 8791)
 General Banking Law of 2000
(R.A. No. 8791)
POLICY
To promote and maintain a stable and efficient banking and financial
system that is globally competitive, dynamic and responsive to the
demands of a developing economy. (Sec. 2)
DEFINITION AND CLASSIFICATION OF BANKS
• Banks shall refer to entities engaged in the lending of funds obtained in
the form of deposits. (Sec. 3.1, GBL)
CORE BANKING FUNCTIONS
• Taking of deposits from the public
• Lending out these funds (Morales, The Philippine GBL Annotation).
Definition of Terms
a. UNIVERSAL BANKS – these used to be called expanded commercial banks
and their operations are primarily governed by the General Banking laws. They
can exercise the powers of an investment house and invest in non-allied
enterprises. They have the highest capitalization requirement.
b. COMMERCIAL BANKS – these are ordinary or regular commercial banks, as
distinguished from a universal bank. They have a lower capitalization
requirement than a universal bank and cannot exercise the powers of an
investment house and invest in non-allied enterprises.
c. THRIFT BANKS – shall include savings and mortgage banks, private
development banks, and stock savings and loans association organized under
existing laws.
d. RURAL BANKS - banks which are designed to make needed credit available
and readily accessible in the rural areas on reasonable terms.
e. COOPERATIVE BANKS – one organized, the majority share of which is
owned and controlled by cooperatives, primarily to provide financial and
credit services to cooperatives.
f. ISLAMIC BANKS – these are banks the business dealings and activities of
which are subject to the basic principles and rulings of Islamic Shari’a. The
Al Amanah Islamic Investment Bank of the Philippines, which was created
by RA 6848, is the only Islamic bank in the country at this time.
Created by Congress to promote and accelerate socio-economic
development of the Autonomous Region by performing banking, financing
and investment operations and to establish and participate in agricultural,
commercial and industrial ventures based on the Islamic concept of
banking. (Sec. 3 RA. 6848).
g. Other Classification of banks as determined by the Monetary Board.
DISTINCTION OF BANKS FROM QUASI-BANKS AND TRUST ENTITIES
a. QUASI-BANKS
“Quasi-Banks” shall refer to entities engaged in the borrowing of funds
through the issuance, endorsement or assignment with recourse or
acceptance of deposit substitutes as defined in Section 95 of R.A. 7653 for
purposes of relending or purchasing of receivables and other obligations (Sec.
4 par. 3 GBL).
b. TRUST ENTITIES
• Any bank, investment house or a stock corporation duly authorized by the
Monetary Board to engage in trust, investment management and fiduciary
business methodology.
• A trust business is any activity resulting from trusteeship involving the
appointment of a trustee by a trustor for the administration, holding,
management of funds and/or properties of the trustor by the trustee for the
use, benefit or advantage of the trustor or of beneficiaries.
BANK POWERS AND LIABILITIES
A. CORPORATE POWERS – these are the powers enumerated under the
Corporation Code. Section 36 of the Corporation Code provides that
every corporation incorporated under this Code has the power and
capacity:
i. To sue and be sued in its corporate name;
ii. Of succession by its corporate name for the period of time stated in
the articles of incorporation and the certificate of incorporation;
iii. To adopt and use a corporate seal;
iv. To amend its articles of incorporation in accordance with the
provisions of this Code;
v. To adopt by-laws, not contrary to law, morals, or public policy, and to
amend or repeal the same in accordance with this Code;
vi. In case of stock corporations, to issue or sell stocks to subscribers and
to sell treasury stocks in accordance with the provisions of this Code; and
to admit members to the corporation if it be a non-stock corporation;
vii. To purchase, receive, take or grant, hold, convey, sell, lease, pledge,
mortgage and otherwise deal with such real and personal property,
including securities and bonds of other corporations, as the transaction
of the lawful business of the corporation may reasonably and necessarily
require, subject to the limitations prescribed by law and the Constitution;
viii. To enter into merger or consolidation as provided in this Code;
ix. To make reasonable donations, including those for the public welfare
or for hospital, charitable, cultural, scientific, civic, or similar purposes:
Provided, that no corporation, domestic or foreign, shall give donations
in aid of any political party or candidate or for purposes of partisan
political activity;
x. To establish pension, retirement, and other plans for the benefit of its
directors, trustees, officers and employees; and
xi. To exercise such other powers as may be essential or necessary to
carry out its purpose or purposes as stated in the articles of
incorporation.
 B. BANKING AND INCIDENTAL POWERS
All such powers as may be necessary to carry on the business of commercial
banking (Sec. 29). –Implied Powers
• Accepting drafts
• Issuing letters of credit
• Discounting and negotiating promissory notes, drafts, bills of exchange and
other evidence of debt
• Accepting or creating demand deposits
• Receiving other types of deposits and deposit substitutes
• Buying and selling foreign exchange and gold or silver bullion
• Acquiring marketable bonds and other debt securities
• Extending credit
Deposit function
General rule: Only a Universal Bank (UB) Commercial
Bank (KB) can accept or create demand deposits.

Exception: Banks other than a UB or KB with prior

approval of, and subject to such conditions and rules
as may be prescribed by the Monetary Board (Sec. 33,
GBL)
Presumption of ownership of deposits

It is presumed that money deposited in a bank account belongs to

the person in whose name the deposit account is opened.
A depositor is presumed to be the owner of funds standing in his
name in a bank deposit; and where a bank is not chargeable with
notice that the money deposited in such account is the property of
some other person than the depositor, the bank is justified in
paying out the money to the depositor or upon his order, and
cannot be liable to any other person as the true owner. (Fultron
Iron Works Co. v. China Banking Corporation, 1930)
• A bank is under no duty or obligation to make an application or
set-off against the deposit accounts of a borrower. To apply the
deposit to the payment of a loan is a privilege, a right of set-off
which the bank has the option (but not the obligation) to
exercise. (BPI v. CA, 1994)
The rent of safety deposit boxes is a special kind of deposit and
cannot be characterized as an ordinary contract of lease because
the full and absolute possession and control of the deposit box is
not given to the renters. The prevailing rule is that the relation
between the bank renting out and the renter is that of bailor and
bailee the bailment being for hire and mutual benefit. (CA Agro-
industrial Dev. Corp. v. CA, 1983)
5) Receiving other types of deposits and deposit substitutes
Types of Deposits
1. Time Deposit – Interest rate stipulated depending on the number of days.
During this period, the money deposited may not be withdrawn without
incurring penalty. High interest rates.
2. Savings Deposit – Bank pays an interest rate, but not as high as time deposits.
3. Demand Deposits/Current Accounts - No interest is paid by the bank because
the depositor can take out his funds any time. It is called demand deposit
because the depositor can withdraw the money he deposited on the very same
day when he deposited it or at any time thereafter. (Villanueva, Commercial Law
Review, opinion
• Buying and selling foreign exchange and gold or silver bullion
• Acquiring marketable bonds and other debt securities
• Extending credit
Loan Function
“Know your customer” rule
• Before granting a loan or other credit accommodation, a bank must
ascertain that the debtor is capable of fulfilling its commitments to the
bank. (Sec. 40)
• The bank may demand from its credit applicants a statement of their
assets and liabilities and of their income and expenditure and such
information as may be prescribed by law or by rules and regulations of
MB to enable the bank to properly evaluate the credit application which
includes the corresponding financial statements submitted for taxation
purposes to the BIR. (Sec. 40)
Credit enhancement
• If the borrower is less than creditworthy, third persons may enhance his
credit by providing guarantees and other security devices in favor of the
bank. (Morales, The Philippine General Banking Law, opinion)
• A bank cannot lend pesos to a non-resident (BSP Circular No. 22; Sec. 22,
Manual of Regulations on Foreign Exchange Transactions). (Morales, The
Philippine GBL Annotation)
If there is material misrepresentation, the bank may:
• Terminate any loan or other credit accommodation granted on the basis
of said statements; and
• Shall have the right to demand immediate repayment or liquidation of
the obligation (Sec. 40)
Grant of loans
Only in amounts and for the periods of time essential for the effective
completion of the operations to be financed; and
• Consistent with safe and sound banking practices. (Sec. 39)
Purpose of loans
• Purpose must be stated in the application and in the contract between
the bank and the borrower. (Sec. 39)
Effect of usage of loan proceeds for purposes other than those agreed
upon with the bank
• The bank shall have the right to terminate the loan or other credit
accommodation and demand immediate repayment of the obligation.
(Sec. 39)
Amortization on loans and other credit accommodations
• In case of loans and other credit accommodations with maturities of more
than 5 years, provisions must be made for periodic amortization payments,
but such payments must be made at least annually: Provided, however, That
when the borrowed funds are to be used for purposes which do not initially
produce revenues adequate for regular amortization payments therefrom,
the bank may permit the initial amortization payment to be deferred until
such time as said revenues are sufficient for such purpose, but in no case shall
the initial amortization date be later than 5 years from the date on which the
loan or other credit accommodation is granted.
• In case of loans and other credit accommodations to microfinance sectors,
the schedule of loan amortization shall take into consideration the projected
cash flow of the borrower and adopt this into the terms and conditions
formulated by banks. (Sec. 44)
All are subject to such rules as the Monetary Board may promulgate. (Sec. 29,
GBL)
DILIGENCE REQUIRED OF BANKS – RELEVANT JURISPRUDENCE
(Sec. 2) The State recognizes the vital role of banks in providing an
environment conducive to the sustained development of the national economy
and the fiduciary nature of banking that requires high standards of integrity
and performance. In furtherance thereof, the State shall promote and maintain
a stable and efficient banking and financial system that is globally competitive,
dynamic and responsive to the demands of a developing economy.
• Banks are required to exercise the highest degree of diligence.
• Fiduciary Nature of Banks
• Failure on the part of the bank to satisfy the degree of diligence required of
banks may warrant the award of damages.
• Under Sec. 2, the degree of diligence is “high standards of integrity and
performance”.
Fiduciary Obligation of Banks
BPI v. Lifetime Marketing Corp. 555 SCRA 373, 2008
The degree of diligence required of banks is more than that of a
reasonable man or a good father of a family. In view of the fiduciary
nature of their relationship with their depositors, banks are duty-bound
to treat the accounts of their clients with the highest degree of care.
Fiduciary Obligation of Bank Employees
It bears emphasizing that the negligence of banking institutions should
never be countenance. Although its employees may be the ones
negligent, a bank’s liability as obligor is not merely vicarious, but primary,
as banks are expected to exercise the highest degree of diligence in the
selection and supervision of their employees.
Duty on Bank Accounts of Clients
BPI Family Bank v. Franco 538 SCRA 184, 2007
In every case, the depositor expects the bank to treat his account with
utmost fidelity, whether such account consists only of a few hundreds of
pesos or of millions. The bank must record every single transaction
accurately, down to the last centavo, and as promptly as possible. This has
to be done if the account is to reflect at any given time the amount of
money the depositor can dispose of as he sees fit, confident that the bank
will deliver it as and to whomever directed.
A blunder on the part of the bank, such as the dishonor of the check
without good reason, can cause the depositor not a little embarrassment
if not also financial loss and perhaps even civil and criminal litigation. The
point is that as business affected with public interest and because of the
nature of its functions, the bank is under obligation to treat the accounts
of its depositors with meticulous care, always having in mind the fiduciary
nature of their relationship.
Dealings with Registered Land
Banks cannot merely rely on certificates of title in ascertaining the status of
mortgaged properties. As their business is impressed with public interest, they
are expected to exercise more care and prudence in their dealings than private
individuals. Indeed, the rule that persons dealing with registered land can rely
solely on the certificate of tile does not apply to banks.
Degree of Diligence Required of Banks as Lenders- Mortgagees
Consolidated Rural Bank (Cagayan Valley) v. CA 448 SCRA 347, 2005
Banks, their business being impressed with public interest [in this case taking-up
real estate mortgages to secure the loans given], are expected to exercise more
care and prudence than private individual in their dealings, even those involving
registered lands. Hence, for merely relying on the certificates of title and for its
failure to ascertain the status of the mortgaged properties as is the standard
procedure in its operations, the bank is a mortgagee in bad faith.
Relevant Jurisprudence
Simex International v. CA, 1990
As a business affected with public interest and because of the nature of its functions, the
bank is under obligation to treat the accounts of its depositors with meticulous care,
always having in mind the fiduciary nature of their relationship.
PCI Bank v. CA, 2001
Banks are expected to exercise the highest degree of diligence in the selection and
supervision of their employees.
PS Bank v. Chowking Food Corp., 2008
It cannot be overemphasized that the banking business is impressed with public interest.
Of paramount importance is the trust and confidence of the public in general in the
banking industry. Consequently, the diligence required of banks is more than that of the
Roman pater familias or a good father of a family. The highest degree of diligence is
expected.
Bank of America NT&SA v. Philippine Racing Club, 2009
The banking business is so impressed with public interest where the trust and confidence
of the public in general is of paramount importance such that the appropriate standard of
diligence must be high degree of diligence, if not the utmost diligence.
NATURE OF BANK FUNDS AND BANK DEPOSITS
The bank can make use as its own the money deposited
• (Tan Tiong Tick v. American Apothecaries 65 Phil 414, 1938). Said
amount is not being held in trust for the depositor nor is it being kept for
safekeeping.
• Art. 1990 (Civil Code). Fixed, savings, and current deposits of money in
banks and similar institutions shall be governed by the provisions
concerning simple loan.
Confidentiality of Bank Deposits
The prevailing policy of the matter is to preserve the absolute
confidentiality enjoyed by bank deposits.
Republic v. Eugenio, 2008
Indeed, by force of statute, all bank deposits are absolutely confidential,
and that nature is unaltered even by the legislated exceptions referred to
above. There is disfavor towards construing these exceptions in such a
manner that would authorize unlimited discretion on the part of the
government or of any party seeking to enforce those exceptions and
inquire into bank deposits. If there are doubts in upholding the
absolutely confidential nature of bank deposits against the affirming
authority to inquire into such accounts, then such doubts must be
resolved in favor of the former. Such a stance would persist unless
Congress passes a law reversing the general state policy of preserving
the absolutely confidential nature of Philippine bank deposits.
BSP Group, Inc. v. Go, 2010
It is conceded that while the fundamental law has not bothered with the
triviality of specifically addressing privacy rights relative to banking accounts,
there, nevertheless, exists in our jurisdiction a legitimate expectation of
privacy governing such accounts. The source of this right of expectation is
statutory, and is found in R.A.No. 1405, otherwise known as the Bank Secrecy
Act of 1955.
Subsequent statutory enactments have expanded the list of exceptions to this
policy yet the secrecy of bank deposits still lies as the general rule, falling as it
does within the legally recognized zones of privacy. There is, in fact, much
disfavor to construing these primary and supplemental exceptions in a
manner that would authorize unbridled discretion, whether governmental or
otherwise, in utilizing these exceptions as authority to unwarranted inquiry
into bank accounts. It is then perceivable that the present legal order is
obliged to conserve the absolutely confidential nature of bank deposits.
Bank as a Debtor
Deposit is a voluntary agreement, “Know Your Customer” standards
Bank acquires ownership of money deposited; obligation to pay amount, but
not obligation to return the same money (Guingona, Jr. v. City Fiscal of
Manila 128 SCRA 577, 1984)

Payment to proper party-depositor (Fulton Iron Works Co. V. China Banking

Corp. 58 Phil. 206, 1930)
Deposits are not preferred credits (Central Bank v. Morfe 63 SCRA 114, 1975
Bank has right to compensation (Gullas v. PNB 62 Phil. 519, 1935)
No breach of trust - mandamus not a remedy (Lucman v. Malawi 511 SCRA
268, 2006).
STIPULATION ON INTEREST
Interests on Deposits
The Monetary Board has declared that the interest on deposits are not
subject to ceilings (Section 242, MORB). Interest or yield on time
deposit/deposit substitute may be paid at maturity or upon withdrawal
or in advance. However, interest or yield paid in advance shall not
exceed the interest for one year (Section 242.1, MORB)
• The bank can make use as its own the money deposited
• (Tan Tiong Tick v. American Apothecaries 65 Phil 414, 1938). Said
amount is not being held in trust for the depositor nor is it being kept
for safekeeping.
Interest on Loans
• While the Usury Law ceiling on interest rates was lifted by Central Bank
Circular 905, nothing in the said circular grants lenders carte blanche
authority to raise interest rate to levels which will either enslave their
borrowers or lead to a hemorrhaging of their assets (Solangon v.
Salazar 360 SCRA 379).
Effect of Excessive interest Rates:
• Art. 1229. The judge shall equitably reduce the penalty when the
principal has been partly or irregularly or partly complied with by the
debtor. Even if there has been no performance, the penalty may also be
reduced by the courts if it is iniquitous or unconscionable.
Escalation Clause
Agreement by the Bank and the borrower that the obligation shall
become due and demandable upon default of the latter.
While such a agreement is valid, the bank cannot be given unbridled
right to adjust the interest rate independently and upwardly. Such would
negate the mutuality of contracts Floirendo v. Metropolitan Bank, G.R.
No. 148325 September 3, 2007).
Floating Rate of Interest
While it may be acceptable, for practical reasons given the fluctuating
economic conditions, for banks to stipulate that interest rate on a loan
not be fixed and instead be made dependent upon prevailing market
conditions, there should always be a reference rate upon which to peg
such variable interest rates (Consolidated Bank and Trust Corporation
(Solid Bank) v. CA 356 SCRA 671).
GRANT OF LOAN AND SECURITY REQUIREMENTS
a. RATIO OF NETWORTH TO TOTAL RISK ASSETS
The Monetary Board shall prescribe the minimum ratio which the net worth of
a bank must bear to its total risk assets wh.ich may include contingent
accounts, and may:
- Require that such ratio be determined on the basis of the Net Worth and
Risk Assets of a bank and is subsidiaries, financial or otherwise;
- Prescribe composition and manner of determining Net Worth and Total Risk
Assets of the banks and their subsidiaries.
Provided:
(i) The Monetary Board may require or suspend compliance with such ratio
whenever necessary for a maximum period of one year;
(ii) The ratio applied uniformly to banks of same category.
 SINGLE BORROWER’S LIMIT (SBL)
Except as the Monetary Board ay otherwise prescribe for
reason of national interest, total amount of loans, credit,
accommodations and guarantees that may be extended
by a bank to any person, partnership, association or
other entity shall at no time exceed 20% of the net
worth of such bank.
However, in 2010, the SBL was increased to 25% for a
period of 3 Years. Further, in 2013, the Bankong Sentral
ng Pilipinas issued Circular No. 779 which extended the
25% SBL for another 3 years.
Also, unless the Monetary Board prescribes otherwise, the SBL
may be increased by an additional 10% of Net Worth, provided
that the additional is supported adequately by trust receipts,
shipping documents, warehouse receipts or other similar
documents transferring or securing title covering readily
marketable, non-perishable goods which must be fully
recovered by insurance, which shall include:
Direct liability of the maker or acceptor of paper discounted
with or sold to such bank, and liability of general indorser,
drawer or guarantor who obtains a loan or other credit
accommodation from, or discounts paper with, or sells papers
to such bank;
In the case of an individual who owns or controls a majority interest in a
corporation, partnership, association or any other entity, the liabilities to
such bank;
In case of the corporation, all liabilities to such bank of all subsidies in
which such corporation owns or controls a majority interest; and
In case of a partnership, association or other entity, the liabilities of the
members thereof to such bank.
Coverage – For purposes of the SBL coverage, loans and other credit,
accommodations and guarantees shall exclude those which are:
• Secured by obligations of the BSP or Philippine Government;
• Fully guaranteed by the Government as to the payment of principal
and interest;
• Covered by assignment of deposits maintained in the lending bank and
held in the Philippines;
• Under letters of credit, to the extent covered by margin deposits;
• Those which the Monetary Board may, from time to
• time, specify as non-risk items
• Loans and other credit accommodations, deposits maintained with,
and usual guarantees by a bank to any other banks or non-bank entity,
whether locally or abroad.
Purpose
• To prevent the bank from making excessive loans and other credit
accommodations to a single borrower or corporate group, including
guarantees for the account of such borrower or group. The bank is
prohibited from… placing many eggs in the basket of one client. [It] is a
damage control mechanism [and] a device for risk amelioration.
(MORALES, The Philippine General Banking Law, Opinion)
Basis for determining compliance
• The basis for determining compliance with the SBL is the total credit
commitment of the bank to the borrower. (Sec. 35.1, GBL)
Inclusions in the ceiling
• The direct liability of the maker or acceptor of paper discounted with or
sold to such bank and the liability of a general indorser, drawer or
guarantor who obtains a loan or other credit accommodation from or
discounts paper with or sells papers to such bank;
• In the case of an individual who owns or controls a majority interest in
a corporation, partnership, association or any other entity, the liabilities
of said entities to such bank;
• In the case of a corporation, all liabilities to such bank of all subsidiaries
in which such corporation owns or controls a majority interest; and
• In the case of a partnership, association or other entity, the liabilities of
the members thereof to such bank. (Sec. 35.3, GBL)
Guidelines on the wholesale lending of government banks
• It shall apply only to loans granted by participating financial institutions
(PFIs) on a wholesale basis for onlending to end-user borrowers;
• It shall apply only to loan programs funded by multilateral,
international, or local development agencies, organizations, or
institutions, especially designed for wholesale lending activities of
government banks;
• The end-user borrowers of the PFIs shall be subject to the 25% SBL, not
the increased ceiling of 35%; and
• Government banks shall observe appropriate criteria for accrediting
PFIs and for the grant/renewal of credit lines to accredited PFIs. (BSP
Circular No. 425 dated March 25, 2004)
Exclusions from the ceiling
• Loans and other credit accommodations
• Secured by obligations of the BSP or of the Philippine Government
• Fully guaranteed by the government as to the payment of principal and
interest;
• Covered by assignment of deposits maintained in the lending bank and
held in the Philippines;
• Under letters of credits to the extent covered by margin deposits; and
• Specified by the Monetary Board as non-risk items (Sec. 35.5, GBL)
Combination of liabilities
• The MB may prescribe the combination of the liabilities of subsidiary
corporations or members of the partnership, association, entity or such
individual under certain circumstances, including but not limited to any of
the following situations:
• The parent corporation, partnership, association, entity or individual
guarantees the repayment of the liabilities;
• The liabilities were incurred for the accommodation of the parent
corporation or another subsidiary or of the partnership or association or
entity or such individual; or
• The subsidiaries though separate entities operate merely as departments or
divisions of a single entity.
• (Sec. 35.4, GBL)
• Loans and other credit accommodations, deposits maintained with, and
usual guarantees by a bank to any other bank or non-bank entity, whether
locally or abroad, shall be subject to the prescribed limits. (Sec. 35.6, GBL)
Inclusion of Parent Corporation
• Even if a parent corporation, partnership, association, entity or an
individual who owns or controls a majority interest in such entities has
no liability to the bank, the Monetary Board may prescribe the
combination of the liabilities of subsidiary corporations or members of
the partnership, association, entity or such individual under certain
circumstances, including but not limited to any of the following
situations:
• Parent corporation, partnership, association, entity or individual
guarantees the repayment of the liabilities;
• Liabilities were incurred for the accommodation of the parent
corporation or another subsidiary or the partnership or association or
entity or such individual; or
• Subsidiaries through separate entities operate merely as departments
or divisions of a single entity. (Villanueva, 2009)
RESTRICTIONS ON INSIDER LENDING:
BANK EXPOSURE TO
DIRECTORS, OFFICERS, STOCKHOLDERS AND THEIR RELATED INTERESTS
(DOSRI)
General rule: No director or officer of any bank:
• Shall, directly or indirectly, for himself or as the representative or agent
of others, borrow from such bank, nor
• Shall he become a guarantor, endorser or surety for loans from such
bank to others, or in any manner be an obligor or incur any contractual
liability to the bank
Exceptions:
• Valid insider lending (Sec. 36, GBL)
• Loans, credit accommodations and guarantees extended by a cooperative
bank to its cooperative shareholders (Sec. 36, GBL)
Requirements for valid insider lending
• In the regular course of business;
• Upon terms not less favorable to the bank than those offered to others;
• There is a written approval of the majority of all the directors of the bank,
excluding the director concerned; (Except: granted to officers under a fringe
benefit plan approved by the BSP;
• The required approval shall be entered upon the record of the bank and a
copy of such entry shall be transmitted forthwith to the appropriate
supervising and examining department of the BSP;
• Limited to an amount equivalent to the DOSRI borrower’s unencumbered
deposits and book value of his paid-in capital contribution in the bank (Sec.
36, GBL
Exceptions:
• Non-risk items; and
• Loans in the form of fringe benefits.

A DOSRI borrower is required to waive the secrecy of his “deposits of

whatever nature in all banks in the Philippines.” (Sec. 26, NCBA)
Purpose
• The general policy behind DOSRI rules is to level the lending field
between the “insiders” and the “outsiders”. The objective is to prevent
the bank from becoming a captive source of finance for DOSRI.
(Morales, The Philippine General Banking Law, Opinion)
• “Finally, as envisaged, the liberal foreign bank entry policy will further
greatly expand sources of financing.”

• Aside from the SBL, banks have continuously undergone stress tests in
order to see how possible write-downs could affect their stability.

• Latest data (2014) showed universal and commercial banks have improved
their capital ratios as of end-September last year even under the stricter
Basel 3.

• Higher capital requirements were imposed in January 2014 under Basel 3,

an updated set of reforms meant to strengthen the regulation, supervision
and risk management of banks.
Last year (2016), the central bank said its policy-making Monetary
Board has raised the limits for banks in terms of lending funds to
related parties that are taking on projects identified under the
government’s Philippine Development Plan and Public Investment
Program (PDP/PIP).
“Exposures to subsidiaries and affiliates in PDP/PIP projects shall be
subject to higher individual and unsecured limits of 25% and 12.5% of
the net worth of the lending bank, respectively, as compared with the
ceilings previously set at 10% and 5%,” the central bank said in its
press statement.
“This is to encourage more entities to participate in PDP/PIP-related
initiatives to ultimately contribute to continued economic growth.”
Under the relaxed rules, loans extended to related parties for project financing
will not be subject to the ceiling for unsecured loans while the project is in pre-
operational phase, the BSP said. It is only when the project is in full swing that
the loan will be covered by such limit.

The new rules also raised limits for loans granted to subsidiaries and affiliates
undertaking PDP/PIP infrastructure projects.

However, banks must still subject loan applications from related parties to
internal risk management protocols to comply with rules introduced by the BSP
last December to prevent so-called sweetheart deals that could imperil their
financial position. In particular, banks and other supervised financial entities
must adopt “strong” measures to protect their financial footing before granting
any loan, such as a pledge over the borrower’s shares, assignment over the
borrower’s assets, assignment of all revenues and cash waterfall accounts, and
assignment of project documents.
The BSP also fine-tuned definitions of “related interest” and “affiliates” in
order to calibrate prudential requirements with the perceived degree of
potential abuse.

“Relationships arising from common ownership and concurrent

directorships are redefined putting emphasis on the ability of the
concerned owner or director to exercise control in the borrowing entity,”
the central bank explained.
• “Finally, as envisaged, the liberal foreign bank entry policy will further
greatly expand sources of financing.”

• Aside from the SBL, banks have continuously undergone stress tests in
order to see how possible write-downs could affect their stability.

• Latest data (2014) showed universal and commercial banks have improved
their capital ratios as of end-September last year even under the stricter
Basel 3.

• Higher capital requirements were imposed in January 2014 under Basel 3,

an updated set of reforms meant to strengthen the regulation, supervision
and risk management of banks.
Last year (2016), the central bank said its policy-making Monetary
Board has raised the limits for banks in terms of lending funds to
related parties that are taking on projects identified under the
government’s Philippine Development Plan and Public Investment
Program (PDP/PIP).
“Exposures to subsidiaries and affiliates in PDP/PIP projects shall be
subject to higher individual and unsecured limits of 25% and 12.5% of
the net worth of the lending bank, respectively, as compared with the
ceilings previously set at 10% and 5%,” the central bank said in its
press statement.
“This is to encourage more entities to participate in PDP/PIP-related
initiatives to ultimately contribute to continued economic growth.”
Under the relaxed rules, loans extended to related parties for project financing
will not be subject to the ceiling for unsecured loans while the project is in pre-
operational phase, the BSP said. It is only when the project is in full swing that
the loan will be covered by such limit.

The new rules also raised limits for loans granted to subsidiaries and affiliates
undertaking PDP/PIP infrastructure projects.

However, banks must still subject loan applications from related parties to
internal risk management protocols to comply with rules introduced by the BSP
last December to prevent so-called sweetheart deals that could imperil their
financial position. In particular, banks and other supervised financial entities
must adopt “strong” measures to protect their financial footing before granting
any loan, such as a pledge over the borrower’s shares, assignment over the
borrower’s assets, assignment of all revenues and cash waterfall accounts, and
assignment of project documents.
The BSP also fine-tuned definitions of “related interest” and “affiliates” in
order to calibrate prudential requirements with the perceived degree of
potential abuse.

“Relationships arising from common ownership and concurrent

directorships are redefined putting emphasis on the ability of the
concerned owner or director to exercise control in the borrowing entity,”
the central bank explained.
• Relationships arising from common ownership and concurrent
directorships are redefined putting emphasis on the ability of the
concerned owner or director to exercise control in the borrowing entity,”
the central bank explained.

• “Following this principle, cases wherein the common director is an

independent director or a director holding nominal share in the
borrowing entity are considered transactions with counterparties who
are not related to” BSP-supervised financial institutions.

• And to promote responsible lending, the BSP said banks have to deduct
from their capital any credit extended to DOSRI which did not observe
the “arm’s length” rule.
Number of local banks are owned by conglomerates, some of which are
also engaged in infrastructure development under the PPP (Public-Private
Partnership) scheme. These include listed BDO Unibank, Inc. and China
Banking Corp. which are both owned by the Sy family’s SM Investments
Corp.; Metropolitan Bank and Trust Co. and its subsidiary Philippine
Savings Bank under taipan George S.K. Ty’s GT Capital Holdings, Inc.; Ayala
Corp.’s Bank of the Philippine Islands (BPI); Aboitiz Equity Ventures, Inc.’s
Union Bank of the Philippines; East West Banking Corp. of the Gotianun’s
Filinvest Development Corp.; Rizal Commercial Banking Corp. of the
Yuchengco Group of Companies; Robinsons Bank Corp. of Gokongwei-led
JG Summit Holdings, Inc.; Asia United Bank of the Rebisco group; the San
Miguel Corp. group’s Bank of Commerce; and Philippine National Bank of
Lucio C. Tan’s LT Group, Inc.