The Philippines Herald

Media

Part of The Philippines Herald

Title: The Philippines Herald
Issue Date: May 31, 1970
Year: 1970
Language: English
Rights
extracted text: (JheTPhllippmes Wald /May 31, 1970 X_______ —_________________________/ banking industry today Pagka-sueldo, where to go ? sa KAPIT-BANCO handang tumulong sa inyo KAPIT-BANCO. Your neighbor bank. That's Republic Bank na higit na malaplt sa inyo. Wherever you are .. . sa dscuela, sa opislna. sure may KAPIT - BANCO kayo I Right there in your neighborhood. Ready to serve you at ang iba pang kapitbahay. And from centavo to peso, and peso after peso, you'll earn at KAPIT-BANCO: a whooping 8% on Time Deposit, and 6% on Savings Deposit computed monthly. So why not? This payday - right after the sueldo - go to your KAPIT-BANCO. It’s the smartest thing to do. SenuhlirSiank the bamk /nj&xt dotrc Page 2 BANKING SUPPLEMENT Sunday, May 31, 1970 The banking community in the Philippines has grown by leaps and bounds since the Central Bank was established in 1949 and thus the adoption of the managed currency system. This could be gleaned from the proliferation of commer cial banks, rural banks, savings banks, private development banks, and other institutions engaged in banking services now in operation in this country. A tourist had observed that there are more banks here than even in more developed countries. And C.B. statistical data seem ed to bear this out. As of Dec. 31, 1969, the total number of commer cial banks reached 606, composed of 39 offices and 567 branches and agen cies. Last year alone, 23 branches and agencies of commercial banks were established. 452 Rural Banks Forty one new rural banks were opened in 1969, bringing the total number to 452. Of this total, 226 rural banks wer? located in Luzon, 79 in the Visayas and 47 in Mindanao. Sixty rural banks were authorized to accept demand deposits. No new savings bank was established in 1969. However, six branches and one extension office were opened, bringing the to tal number of savings banks in actual operation to 48 (10 head offices, 19 branches and 19 exten sion offices). Sixteen postal stations of the government-owned Postal Savings Bank were opened in 1969, bringing the total number in opera tion to 1,445 during the . period under review. The total number of private development banks By NICASIO REBONG II Herald Staff Member grew to 29 with the open ing of two new private de velopment banks last year. Growth Factors The phenomenal growth of the banking communi ty was attributed to the following factors: liberal minimum capital require ments for the establish ment of banks, favorable conditions, and other in centives. For the past 20 years, the C.B. has actively sought to encourage the growth of the banking system. Commercial banks mergers are facilitated and large scale or branch banking is encouraged so that the capital structure of the banking system can be strengthened, its li quidity position improved and the economies of large-scale banking may be enjoyed. P12 Million According to the C.B. annual report for 1969, total resources of com mercial banks amounted to P12,050 million, repre senting a growth of Pl,139 million or 13.2 per c6nt compared to the incre ment of Pl,276 million or 13.2 per cent in 1968. Earning assets increas ed by P933 million or 82 per cent of the total ex pansion in banks’ resour ces, compared with the P867 million growth in the previous year. By reducing the in crease in their liquid as sets to only P55 million or 3.3 per cent, as against P342 million or 26.1 per cent last year, the com mercial banks increased their other assets by Pl52 million or 20.8 per cent as against P67 million or 10.1 per cent in 1968. With the increase in de mand deposits, current liabilities of commercial banks expanded consider ably by $945 million or 14.8 per cent in 1969. compared with expansion of P326 million in 1968. 54 Per Cent Demand deposits in creased by P511 million or 54 per cent of the over all increment. Savings and time deposits gained P314 million as against increment of P200 million in 1968. Similarly, bills payable went up by P213 million, slightly below the P283 million growth in 1968 while guarantee ac counts declined by P254 million in 1969 compared to a considerable increase of P429 million in 1968. Net worth of commer cial banks rose from Pl,140 million in December 1968 to Pl,294 million at the end of 1969, or an in crease of P154 million compared to an increase of P98 million in 1968. As regards the rural banks, the C.B. reported their total resources amounted to P409 million as of July 31, 1969, an Increase of P30 million or seven per cent from the 1968 level. Outstanding loans went up by P26 million to P416 million- and investments in government securities gained nominally by P0.5 million to P7 million. Total deposit liabilities also expanded by P15 mil lion to P183 million and net worth rose to P193 mil lion. Savings Banks Meanwhile, total loans granted by savings banks dropped by P38 million or 27 per cent as against the P15 million or 11 per cent expansion registered in 1968, the C.B. report said. Similarly, the growth in resources slowed down from 21 per cent in 1968 to only 16 per cent in 1969. The P79 million expansion in resources in 1969 was brought about mainly by the P82 million increment in holdings of government securities. The savings banks dur ing the period under re view were granted an ad ditional P4.1 million emer gency loans by the C.B. but repaid P27.5 million. As a result, outstanding emergency loans of these banks from the C.B. drop ped by P23.4 million to P29.5 million at the end of 1969. Loans outstanding in creased slightly by P2 mil lion to P275 million. De posit liabilities improved by P82 million or 24 per cent as against a drop of P7 million or two per cent in 1968 while net worth decreased by P2 million or three per cent to P66 mil lion. Total resources of PSB increased by P2 million from the 1968 level. How ever, savings deposits de creased by Pl million to P58 million. Private Banks Private development banks expanded by P14 million to reach P144 mil lion in total assets in 1969. Total loans outstanding increased by P9 million to a level of Pl 15 million and investments in securities rose by P0.1 million to P2 million. Deposit liabilities like wise increased by P9 mil lion to P54 million. Simi larly, outstanding redis counts with the Develop ment Bank of the Philip pines went up by P0.4 mil lion to P25 million and capital assistance from this institution increased by Pl million to P25 mil lion Net worth also grew by P4 million to P60 million. An interim study pre pared by Sycip, Gorres, Velayo & Co. for a threemonth period ending March 31, 1970 said that total assets of commercial banking system were P8 million less than in Dec. 31, 1969. Largest Drop The largest drop in to tal assets was registered by the Philippine Natio nal Bank., manifested in its investments by P92 million and the drop in its cash and due from banks of P38 million. The SGV study attri buted the decline in total assets of PNB mainly to the reduction in its bills payable and “other liabi lities” by P170 million. Other highlights of the SGV study are: —Five private develop ment banks showed re ductions in total assets of Sunday, May 31, 1970 BANKING SUPPLEMENT Page 3 Equitable Bank Branch in Makati Philippine Banking Corporation Head Office at Port Area more than PIO million each, with one bank showing a drop of P43 mil lion. —The net decline in to tal assets of private do mestic banks amounted to only P3 million. Principal cause of the decline was the drop in deposits with private domestic banks of P64 million, which was counterbalanced by ad ditions tc these banks’ bills payable and “other liabilities’’ of P52 million and an increase in their net worth of P12 million. —In contrast to domes tic banks, the four bran ches of foreign banks re gistered net additions to total assets of P86 million during tne quarter, with two banks accounting for most of this increase. Main sources of additions to the total assets of fo reign banks were the in crease in their deposit ba lances of P44 million and in their due to head office accounts of P25 million. —Total liquid assets of the commercial banking system of P2.795 million as of March 31, fell short by P69 million of balances at year-end 1969. Of the 35 domestic banks, 25 showed declines in liquid assets. All foreign banks showed increase in liquid assets. —The decline in liquid assets was mainly from cash and due from banks, which dropped by P126 million. The increase in cash and due from banks as of Dec. 31, 1969 from balances of the previous quarter was about P388 million. —About P58 million was added to investments in bonds and other secu rities during the quarter, with a private banks show ing an increase of P23 million; PNB, P14 million; and a foreign bank, PIO million. About half of the private domestic banks re gistered declines in invest ments. —Loans outstanding of the commercial banking system amounting to ab out P7.9 billion as of March 31, comprise ap proximately 66 per cent of the banks’ total as sets. Private domestic banks hold about 55 per cent of ihe total loans; PNB, about 35 per cent. —This quarter’s in crease of Pl 10 million was due principally to loan additions from the private banks (domestic P45 mil lion, foreign P50 million). —PNB’s net increment in total Ioans during the quarter amounted to only P18 millton, after the sub stantial decline in its over draft balances of P90 mil lion. Loans and discounts as well as customers’ lia bility acceptances of PNB rose by P57 million and P58 million respectively. —As of March 31, de posits with the Philippine commercial banking sys tem totalled P7.1 billion, of which 59 per cent is £age 4 BANKING SUPPLEMENT Sunday, May 31, 1970 with private domestic banks and 30 per cent .with PNB. —The net increment of P50 million in deposits with the commercial bank ing system resulted from additions to time and sav ings deposits of Pl 15 mil lion and deposits with the government of P39 mil lion, after reductions in demana deposits and de posits of banks by P71 million 3nd P33 million, respectively. —Deposits with private domestic banks dropped by a net amount of P63 million; those with PNB and foreign banks rose by P69 million and P44 mil lion, respectively. —This quarter, PNB re duced its bills payable and “other liabilities by a substantial P170 million. —Private d o m e s tic banks continued to liqui date their bills payable (by P45 million this quar ter) . Net additions to this group of account arose mainly from the incur rence ol additional “other liabilities” of P50 million and additions to marginal deposits on letters of cre dit of P33 million. An increase of P20 mil lion during the first quar ter of 1970 brought the total net worth of domes tic commercial banks to about Pl.2 million as of March 1970. —Unused letters of cre dit rose by a substantial Pl,484 million this quar ter, with PNB accounting for P929 million of the increase. The increment of P929 million is about 174 per cent of the addi tions to PNB’s unused let ters of credit for 1969. —Unused letters of cre dit of private domestic banks rose by P326 mil lion. Last year, unused letters of credit of these banks dropped by P68 mil lion from the previous year. —The significant in crease in unused letters of credit may be attributed mainly to the floating ex change rate adopted on Feb. 21, 1970 and the si multaneous lifting of the ceiling on foreign curren cy letters of credit. The floating rate for the peso is around P6 to U.S. $1 as compared to the parity rate of P3.90 to U.S. $1. THE CORNER BANK During the recent wave of student demonstrations against the “establish ment” — the government, the capitalists, the privi leged elite, etc., it is re freshing to note that one bank continued to identify itself with the masses without any cry of dissent from the protestors. This is not at all surpris ing since Provident Sav ings Bank — “The Corner Bank,” has been closely identified with the masses from the time it first for mally opened its doors to the public six years ago. Indeed, it was established primarily to serve the banking needs of and help the “common tao.” And it earned its name, “The Corner Bank,” because it has chosen to establish its main office and later its branches where it is con venient and accessible to them — at the corner of the busiest streets. With the sustained sup port and continued pa tronage of the so-called “bakya crowd,” Provident has been able to greatly expand its resources and now ranks among the country’s bigger and more solid savings banks. From a modest start of P3 million, Provident’s to tal resources soared, in a short span of six years, to its present total of P60 million. Within this same span of years, it was able to establish six extension offices to better serve its growing clientele. These branches are all conven iently located in Legarda, Central Market, Ylaya, Evangelista, Baclaran and Rizal Avenue and collec(Continued ou Page Id) Sunday, May 31, 1970 BANKING SUPPLEMENT Page 5 CB Plays Vital Role in Controlling Credit 'Bank of Banks' Central Bank Encourages Growth of RP Banking By DANIEL A. MONTILLA It is indubitably clear that credit should be re gulated since unrestrain ed credit expansion or contraction can lead to unprecedented booms or slumps, causing unhealthy or undesirable effects to the economy. In the Philippines, as well as in other countries where central banking operates, the Central Bank plays a vital role in controlling credit and, if done properly and effica ciously, can contribute to economic stability. Republic Act No. 265, the law which established the Central Bank of the Philippines, provides for various instruments of credit control and these serve not only as imple menting monetary policies but to a great extent they underlie and shape them as well. A significant instru ment of credit control is the imposition of bank re serve requirements. Un der the law, the Monetary Board may prescribe ra tios from 10 per cent to 50 per cent against de mand deposits and 5 per cent to 25 per cent against time and savings deposits. Within these ranges un due expansion of credit can very well be restrict ed. 100 Per Cent However, in periods of inflation if such percen tages are not sufficient to contain credit the law al(Continued on Page 9} BANK OF THE PHILIPPINE ISLANDS “The Pioneer Bank Of The Orient” Established 1851 DOMESTIC AND FOREIGN SERVICES • Checiung Accounts * Savings Accounts » Fixed Deposits • Loans, Discounts A Overdrafts » Commercial i Traveler’s L/Credit * Foreign Exchange * Collections A Transfers • Export^Import Financing TRUST SERVICES • Executor & Administrator • Guardian • Management of Real Property • Custodian of Securities • Trustee d- Transfer Agent in Security • Pacing Agent for Bonds A Coupons • Management of Pension Trust Financing International Trade With Complete World-Wide Facilities If your business is world-wide, you need the world-wide banking fa cilities of the British-owned Hong kong and Shanghai Banking Cor poration specializing in financing international trade with complete world-wide facilities through o networkc-4>over 170 offices in both hemispheres. BRANCHES AND AGENCIES METROPOLITAN AREA: Arranque Espafta Malate (Dart) SUBURBAN AREA: Makati PROVINCIAL: Cebu Davao The Hongkong and Shanghai Banking Corporation A BRITISH BANK SERVING THE PHILIPPINES SINCE 1875 Cagayan do Oro AGENCIBB: Dlgoa Agency (Davao del Bur) San Nicolas Agency (Cebu) Tagum Agency (Davao del Norte) MANILA OFFICE: ILOILO CITY OFFICE: 117 JUAN LUNA*TEL. 47-93-21 LEDESMA St.*TEL.2911 T. S. WRIGHT Resident Manager Page 6 BANKING SUPPLEMENT Sunday, May 31, 1970 It takes men - the best in the business to give birth to creative banking. We’ve put together men whose names read like a who’s who in the banking world. Together, they are setting new horizons in banking services that go beyond commercial banking. We place at your disposal these men - a team of professionals who can help solve any of your financial problems. RIZAL COMMERCIAL BANKING CORPORATION 219 Buendia Avenue. Makati, Hizal. Philippines • Telephone No. 88-98-16 Mem bet: Philippine Deposit Insurance Corporation Bank with RCBC ... your key to creative banking. Sunday, May 31, 1970 BANKING SUPPLEMENT Page / Look to Bancom for: Investment Advice Financial Consultancy Investment Banking Services Money and Capital Market Operations bancomJ SURROUNDS cs xl W.?? ViV k YDUR FINANCIAL < PROBLEMS WITH } SOLUTIONSKl k A In the short span of its existence, Bancom Development Corporation has helped provide functional solutions for the in vestment and financial problems of both private and governmental sectors of the economy. In its continuing role as the nation's lead ing investment bank Bancom has raised over fifty million pesos in capital funds for various corporations and has helped to implement innovations in fund ma nagement for the government. Page 8 BANKING SUPPLEMENT Sunday, May 31. 1970 CB Plays (Continued from Page 0) lows the MB to prescribe ratios even as high as 100 per cent against any fu ture increase in the depo sits of each bank and a decrease in these reserve requirements in times of deflation. An equally important instrument designed for the same end is the fixing of interest or rediscount rates on Central Bank loans. Judging from the experiences of many coun tries, this instrument in the hands of the CB re mains a most potent and lating inflationary and deflationary tendencies. However, in order not to cause harm, this instru ment should be used only in accordance with the character and terms of credit operations, the cre dit needs of the market, composition of the Central Bank’s portfolio and the general requirements of the national monetary po licy. Thus, in this connection, the law requires that the radiscounts, discounts, loans and advances which the CB is authorized to ex tend to banking institu tions shall be used to legulate the volume, costs, availability and character of bank credit and to pro vide the banking system with liquid funds in times of need. Circulars A third type of credit control is direct action by the Central Bank. This kind of instrument regu lating credit may assume direct dealings with banks on a bank-to-bank basis where the other means of control have failed or proved inadequate. The forms of direct action may consist of memoranda and circulars and these are necessarily coercive re quiring compliance from individual banks and car effective weapon in regurying penalties in case of non-compliance. However, short of em ploying the coercive meas ure of direct action or without resorting to the You get a lot more than interest on your money when you save at Citibank As little as P5.00 opens a Citibank Savings Account - and we have unique ways of making your money grow and of making it more useful to you. For instance, Citibank Savers can get low-cost loans: Our customers may be eligible for loans at bank rates. Bank loans cost much less than any available elsewhere. - You can apply for money to improve your home — for appliances or a new car — tor education and recreation. Your money works for you - yet you never take your savings out of the bank. In addition we offer: • In-Plant Banking - "bank from your office" • Systematic Savers Plan - automatic transfer^ from current account to savings account. • Down Payment Savings Plan • 6% interest computed and paid quarterly. Plus this new service: PERSONAL FINANCE SPECIALISTS In our lobby, you’ll meet a group of friendly people. They will answer your questions about loans, savings plans, even your budget. Pay us a visit, won’t you? We’d like to meet you personally. FIRST NATIONAL CITY BANK Juan Luna. Port Area. Cebu. Clark Airbase The only bank your family ever needs 1970 BANKfNGSUPPLEMENT Pdge 9 other equally mandatory instruments of credit con trol. the CB can still at tain the desired goal by means of moral suasion. This tool may take the form of published an nouncements, holding of conferences, meetings ^ith the Bankers Associa tion of the Philippines (BAP) and the like where in plans and courses of action are proposed and discussed. The object is to seek the cooperation of banks in the realization of the objectives of the Cen tral Bank tc stabilize the currency and promote overall economic progress. That this approach has proven successful in ma ny cases in the past, in that the banking commu nity has heeded the call of PNB BANK MONEY ORDER (BMO) are now available at the following: PASAY CITY DEVELOPMENT BANK 2462 Taft Avenue Extension Pasay City 2ND BULACAN DEVELOPMENT BANK MacArthur Highway Meycauayan, Buiacan and also at its Branches at: Malolos, Valenzuela, (Polo) Bocaue, including its Extension Office at Meycauayan town proper BMO IS EVERYWHERE FOR YOU! PHILIPPINE NATIONAL BANK 124 Branches and Aganciaa throughout tho Philippine* Correspondent Banka throughout tho World Cable Addrow: PHILNABANK support by the Central Bank, is due largely to the fact that appeals of this sort have instilled in the banks a sense of belonging and of being enthusiastic partners with the CB in the praiseworthy task of bringing about monetary stability and material wel fare . Open Market Another important measure of credit control which is. beginning to take roots in developing coun tries although still in its infancy in the Philippines is the traditional tool of open market operations. This instrument can very well serve as a brake to unwarranted expansion of credit in times of inflation and as an accelerator in granting more credit in periods of deflation. The first situation can be effected when the Cen tral Bank shall not make purchases of securities in the open market or at best minimize such purchases or even sell its security holdings. On the other hand, the second situation, i. e., in case of declining money supply and big do ses are needed to be in jected into the economy, is realized when the CB undertakes more purcha ses, withholds sales of its security holdings or re purchases its bonds or certificates of indebted ness. In this country open market operations »has been resorted to not only to control credit but also to make more people bank conscious since commer cial banks serve as agents in the encashment of bonds, to encourage forced savings habits and, most importantly, to finance economic development of the country. In addition, when open market operations expand or restrict credit, bank re serves are either increased or decreased. When the Central Bank purchases securities in the open mar ket the proceeds of the sale are credited to the member bank’s deposit ac counts at the Central Bank. This will increase the reserves of the banks because of an increase of the money available for circulation. Conversely, when the CB sells securities in the open market, the deposit accounts of the member bank will be debited, re sulting in the shrinkage of money supply and thereby in the bank reserves. Thus if the bank reserves are expanded member banks can provide more credit to the public and if bank re serves are reduced less cre dit is available. Other Reasons Besides the fact that open market operations as a uevice in controlling credit is comparatively of recent vintage in the Philppines; there are other reasons why it cannot be used extensively as yet in this country. For one thing, the market for se curities is small and the country is still largely agricultural where it is duiicuit to develop among the people the conscious ness of investing their mo ney in Donas and securi ties. For another thing, the people are not accustomed to buying and selling them and it is believed it would take some time to reorient their minds toward invest ment in securities. Never theless, education and mo ral suasion can be very useful measures that can bring about changes in this direction. There are still other ins truments that can control credit and which are bet ter known as selective cre dit control measures such as the placing of ceilings on rediscounts of commer cial banks and the re quirement that commer cial banks should main tain a one-to-one ratio between their actual fore ign exchange assets and foreign exchange liabili ties. There are authorities, however, such as Dr. Gre gorio S. Miranda, who claim that the former measure did not entirely curb lendings made by commercial banks and therefore not very effec tive in controlling credit. But the one-to-one ratio which was designed to check unnecessary im ports has been more effec tive in regulating credit with the added advantage of reducing the amount of the foreign exchange lia bilities of commercial banks with the correspon ding increase’ in their fo reign exchange assets. Other Measures Still in certain instances these traditional instru- * ments of credit control may not be effective enough to cope with the situation, say a rapid skyrocketting in money sup ply or an unchecked de crease in the quantity of money in circulation, bringing about a serious case of deflation. To be sure, many central banks in the world, including ours, have invariably em ployed other measures, singly or collectively in conjunction with the tra ditional instruments. These measures are the rationing of credit (i.e., placing a limit on dis counts) , prescribing mini mum cash margins for opening letters of credit and the imposition of mi nimum ratios which ca pital and surplus of banks must bear to the volume of then assets. By and large, however, all these credit control measures, despite their li mitations imposed by cir cumstances, lack of fiscal restram t, the law and the usual untra m m e 11 e d spending on developmen tal projects and public works, have contributed in one form or another to ward the expansion of cre dit and the curbing of un warranted expansion and consequently that too of the money supply. *His work on this mat-' ter, Business and Go vernment, has been used as reference for this ar ticle. The Corner Bank (Continu.ru /tom Page 5> tively account for 53 per cent of Provjdent’s total number of depositors and 42 per cent of its total de posits. To keep pace with the bank’s growth, Provident has expanded its lending operations. At present, its total outstanding loans amount to over P41 mil lion. A majority of these loans were granted for real estate development and housing construction as a response to the present need for housing facilities. Provident today enjoys the trust and confidence of over 110,000 depositors who avail of the 12-hour service of the bank from Monday to Saturday. Such, trust it has continuously nurtured through improv ed and better services and relentless efforts in looking for means to bring higher returns for the funds en trusted to it by these de positors. Page'10 BANKING 'SUPPLEMENT Sunday, May 31, 1970 ------------------------NCR Century Series-the world’s most advanced new family of computers—guaranteed to solve the ever- growing paperwork problems of today and the future. Never before so much performance at so low a cost. That’s our big story — the NCR Century» Series. This computer family will revolu tionize your ideas about computer capa bilities and costs. New technological inno • vations make possible outstanding price performance. Flexibility in real-time pro cessing and multi-programming operations guarantee the solution to ever-growing paperwork problems. And best of all, true upward compatibility. No reprogramming required as you move upward in size. This means tremendous savings in cost anc£ time to name just two benefits. To get the complete story of the Century, see the NCR systems representative today at Erlanger & Galinger, Araza Bldg., 8735 Paseo de ~ “ * 88-19-81. Roxas, Makati, Rizal. _Tel. & 4 3 Sunday, May 31, T970 BANKING SUPPLEMENT Page 11 Protection of Depositors How PDIC Strengthens Banking System The Philippine Deposit Insurance Corporation is a government entity creat ed by law io protect bank depositors and to safe guard the nation’s money supply. Under Republic Act No. 3591, PDIC in sures individual depositors up to PIO,000 of their ba lances in every PDIC in sured bank. This is PDIC’s primary objective. However, PDIC’s ultimate goal is that of strengthening the entire banking system. By working towards this goal, PDIC — as an insurance company — would in turn be reducing the risk it in sures against. This is why the Deposit Insurance Act also vested PDIC with the govern ment functions of super vising and examining in sured banks. Following WE OFFER FINANCIAL ASSISTANCE TO FACILITATE THE DEVELOPMENT OF INDUSTRY AND COMMERCE FOR THE COUNTRY SERVICES OFFERED : CHECKING ACCOUNT SAVINGS ACCOUNT TIME DEPOSITS INDUSTRIAL LOANS COMMERCIAL LOANS OTHER LOANS COMMERCIAL LETTERS OF CREDIT FOREIGN EXCHANGE TRUST FUNCIIUNS PHILIPPINE BANK OF COMMUNICATIONS HEAD OFFICE: 214-216 Juan Luna, Manila * Tel. 47-96-01 CEBU BRANCH: Cor. Magallanes & Gonzales St., Tel. 2877 are the provisions of the SECTION 1. There is hereby created a Philip pine Deposit Insurance Corp oration hereinafter referred to as the “Corpo ration “which shall insure, as herein provided, the deposits of all banks which are entitled to the bene fits of insurance under this Act, and which shall have the powers herein after granted. Board SECTION 2. The pow ers and functions of the corporation shall be vest ed in a board of directors consisting of three mem bers one of whom shall be the Governor of the Cen tral Bank of the Philip pines and two of whom shall be citizens of the Republic of the Philip pines to be appointed by the President of the Phil ippines with the consent of the Commission on Ap pointments. One of the appointive members shall be the Chairman of the Board of Directors of the Corpora tion who shall be appoint ed on a full time basis for a term of six years at an annual c o m p e n s ation which shall be fixed by the President of the Phil ippines. The other appointive member, who shall be ap pointed for a term of four years and the Governor of the Central Bank shall each receive a per diem of not exceeding P50 for each day of meeting actually attended by them but in no case shall each of them receive more than P500 a month. In the event of a vacan cy in the office of the Go vernor of the Central Bank of the Philippines, and pending the appointment of his successor or during the absence of the gov ernor, the acting governor of the Central Bank of the Philippines shall act ?s member of the Board of Directors. In the event of a vacan cy in the office of the chairman of the board of directors and pending the appointment of his succes sor, the Governor of the Central Bank shall act as chairman. The members of the board of directors shall be ineligible during the time they are in office and for a period of two years thereafter to hold any office, position or em ployment in any insured bank .except that this res triction shall not apply to any member who has serv ed the full term for which he was appointed. No member of the board of directors shall be an of ficer or director of any in sured bank; and before entering upon his duties as member of the board he shall certify under oath that he has complied with his requirement and such certification shall be filed with the secretary of the board of directors. Any vacancy in the board created by the death, resignation, or re moval of an appointive member shall be filled oy the appointment of a new member to complete the unexpired period of the term of the member con cerned. (As amended oy RA No. 6037, approved August 4, 1969). Functions The board of directors shall have the authority. 1. To prepare’ and issue rules and regulations as it considers necessary for the effective discharge cf its- responsibilities; 2. To direct the man agement, operations and administration of the cor poration; 3. To appoint, fix the remunerations and re move any officer or em ploye of the corporation for cause, Provided, how ever, that officers exercis ing discretionary powers shall not be subject to the Civil Service Law (as amended by Republic Act No. 6037, approved Au gust 4, 1969); and 4. To authorize such ex penditures by the corpo ration as are in the inte■ rest of the effective admi nistration and operation of the corporation. SECTION 3. As used in this Act— (a) The term “Board of Directors” means the board of directors of the corporation. (b) The term “Bank” and “Banking Institution” shall be synonymous and interchangeable and shad include banks, commer cial banks, savings banks, mortgage banks, rural banks, development banks, cooperative banks, trust companies, branches and agencies in the Philinpines of foreign banks and all other companies, corporations, partnerships performing banking func tions in the Philippines. (c) The term “receiver” includes a receiver, liqui dating agent, conservator, commission, person, or other agency charged by law with the duty of winding up the affairs of a bank. (d) The term “insured_ bank” means any bank the deposits of which are insured in accordance with the provisions of this Act. (e) The term “non-insured bank” means any bank the deposits of which are not insured. Deposit (f) The term “deposit” means the unpaid ba lance of money or its equivalent received by a bank in the usual course of business and for which it has given or obliged to give credit to a commer cial, checking, savings, time or thrift account or which is evidenced by its certificate of deposit, and trust funds held by such bank whether retained or deposited in any depart ment of such bank or de posited in another bank, together with such other obligations of a bank as the board of directors shall find and shall pres cribe by regulations to be deposit liabilities of the Bank: Provided, That any obligation of a bank which is payable at the office of the bank located outside of the Philippines shall not be a deposit for any of the purposes of this Act or included as part of thp total deposits or of the in sured ' deposit: Provided, further, That any insured bank which is incorporat ed under the laws of the Philippines which main tains a branch outside the Philippines may elect to include for insurance its deposit obligation payable only at such branch. (g) The term “insured (Continued on Page 14) 1970 ’Page 12 BANKING' SUPPLEMENT uP’UpIm«K' up,up this year. Now! Banco Filipino gives you B'Z per annum on Time Deposits for540days ora total of 127. for540 days, Paid in Advance, so your money earns more and more money! BANCO FILIPINO tyirtipAp*• Manila •Philippines "Subok namatibay, snbok namatatag* Sunday, Moy 31,1970 BANKING SUPPLEMENT Page 13 How PDIC Helps Banking System PHILIPPINE VETERANS BANK IN PEACE, AS IN WAR — WE SERVE HEAD OFFICE: PVB Building Bonifacio Drive Port Area, Manila P.O. Box 2330, Manila BANKING SERVICES OFFERED DEPOSIT FACILITIES: Checking Accounts* Savings Deposit* Time Deposit* TRUST SERVICES:* Trusteeship Guardianship Administration Receivership Transfer Agent Safe Deposit Boxes BANK MONEY ORDERS DRIVE-IN AND NIGHT DEPOSITORY SERVICES WITH CORRESPONDENT BANKS IN PRINCIPAL CITIES OF THE WORLD • Insured with Philippine Deposit Insurance Corporation TELEPHONE NOS: 40-00-40 to 49 40-00-51 to 52 CABLE ADDRESS PHILVETBANK LOAN FACILITIES: Agricultural Industrial Commercial FOREIGN TRANSACTIONS: Import & ExportFinancing Foreign Exchange Remittances Collections Travellers Checks (Continued from Page 1?.) deposit” means the net amount due to any depo sitor for deposits in an in sured bank (after deduct ing offsets) less any part thereof which is in excess of PIO,000. Such net amount shall be determin ed according to such regu lations as the board of di rectors may prescribe and in deter mining the amount due to any depo sitor there shall be added together all deposits in the bank maintained in the same capacity and the same right for his benefit or his own name or in the name of others. (h) The term "transfer deposit” means a deposit in an insured bank made available to a depositor by the corporation as pay ment of insured deposit of such depositor in a closed bank and assumed by an other insured bank. Trust Funds (i) The term “trust funds” means funds held by an insured bank in a fiduciary capacity and in cludes without being li mited to, funds held as trustees, executor, admi nistrator, guardian or agent. SECTION 4. The de posit liabilities of any bank or banking institution which is engaged in the business of receiving de posits as herein defined on the effective date of this Act, or which there after may engage in the business of receiving de posits shall be insured with the corporation. (As amended by R.A. No. 602.7 approved August 4, 1969). SECTION 5 HAS BEEN REPEALED SECTION 6. (a) The assessment rate shall be determined by the board of directors: Provided, That the assessment rate shall not exceed one twelfth of one per cen tum per annum. The se miannual assessment for each insured bank shall be the amount of the product of one-half (y2) the assessment rate mul tiplied by the assessment base. The assessment base shall be the amount of liability of the bank for deposits, according to the definition of the term "de posit” in the pursuant to subsection (f) of Section 3 without any deduction for indebtedness of depo sitors: Provided further. That the Bank— (1) may deduct (i) from the deposit balance due to an insured bans the deposit balance due from such insured bank (other than trust funds deposited by it in such bank) which is subject to an immediate withdra wal; and (ii) cash items as determined by either Page 14 BANKING SUPPLEMENT Sundoy, Moy 31, 1970 of the following methods at the option of the bank; (aa) by multiplying by 2 the total of the cash items forwarded for col lection on the assessment base days (being the days on which the aver age deposits are comput ed) and cash items held for clearings at the close of business on said days, which are in the process of collection and which the bank has paid in the regular course of business or credited to deposit accounts, or (bb) by de ducting the total cash items held for clearing at the close of business on said days, which are in the process of collect ion and which the bank has paid in the regular source of business or credited to deposit ac counts, plus such uncol lected items paid or cre dited on preceding days which are in the process of collection; Provided, that the board of direc tors may define the terms “cash items”, “process of collection”, and “uncol lected items’ and shall fix the maximum period for which any such item may be deducted; and (2) may exclude from its assessment base (i) drafts drawn by it on de posit accounts in other banks which are issued in the regular course of bu siness; and the amount of advices or authoriza tions issued by it for cash letters received, directing that its deposit account in the sending bank be charged with the amount thereof; and (ii) cash funds which are received and held solely for the purpose of securing a lia bility to the bank but not in an amount in excess of such liability, and which are not subject to withdrawal by the obli gor and are carried in a special non-interest bearing account desig nated to properly show their purpose. Conditions Each insured bank, as a condition to the right to make any such deduction or exclusion in determin ing its assessment base, shall maintain such re cords as will readily per mitverification of the cor rectness thereof. The se miannual assessment base for one semiannual period shall be the average of the assessment base of the bank as of the dose of bu siness on March thirty-one and June thirty, -and the s e m iannual assessment base for the other se miannual period shall be the average of the as sessment base of the bank as of the close of business on September thirty and D e c e mber thirty-one: Provided, That when any of said days is a nonbusi ness day or a legal holi day, either National or Provincial, the preceding business day shall be used. The certified statements required to be filed with the corporation under sub sections (b) and (c) of this section shall be in such form and set forth such supporting informa tion as the Board of Direc tors shall prescribe. The assessment payments re quired from insured banks under subsection (b) and (c) of this section shall be made in such manner and at such time or times as the board of directors shall prescribe, provided the time or times so pres cribed shall not be later than sixty days after fil ing the certified statement setting forth the amount of assessment. (b) On or before the 15th of July of each year, each ipsured bank shall file with the corporation a certified state ment showing for the six months ending on the pre ceding June thirty the amount of the assessment base and the amount of semi annual assessment due to the Corporation for the period ending on the following December thir ty-one, determined in ac cordance with sub-section (a) of this section, which shall contain or be verified by a written declaration that it is made under the penalties of perjury. (c) Each bank which becomes an insured bank shall not be required to file any certified state ment or pay any assess ment for the semiannual period in which it becomes an insured bank. On the expiration of such period, each such bank shall comply with the provisions of subsection (b) of this section except that the semiannual a s s e ssment base for its first certified statement shall be the as■ sessment base of the bank as of the close of business on the preceding June thirty or December thir ty-one, whichever is ap plicable, determined in accordance with subsec tion (a) of this section. Pro Rata (d) As of December thirty-one, nineteen hun dred sixty-four, and as of December thirty-one of each calendar year there after the corporation shall transfer 40 per centum of its net assessment income shall be credited pro rata to the insured banks based upon the assessment of each bank becoming due during each calendar year. Each year such credit shall be applied by the corporation toward the payment of the total as sessment becoming due for the semiannual assess ment period beginning the next ensuing July 1 and any excess credit shall be applied upon the assess ment next becoming due. The term “net assess ment income” as used therein means the total assessments which become due during the calendar year; (2) additions to re serve to provide for insur ance losses during the calendar year, except that any adjustments to re serve which result in a re duction of such reserve shall be added; and (3) the insurance losses sus tained in said calendar year plus losses from any preceding years in excess of such reserves. If the above deductions exceed in amount the to tal assessments which be come due during the ca lendar year, the amount of such excess shall be restored by d e d u c tion from total assessments be coming due in subsequent 460 Rosorio St., Manila Tel. Nos. 49-97-31 thru 39 METROPOLITAN BRANCHES SAN NICOLAS BRANCH 468 Lavezares St.. Manila Tel Nos. 49-99-45 and 49-99-21 CALOOCAN CITY BRANCH 360-362 Rizal Ave. Ext. Caloocan City Tel Nos. 23-40-44 and 23-09-49 QUEZON CITY BRANCH Sta. Mesa Market Quezon City Tel. Nos. 61-15-89 and 61-20-19 PASAY CITY BRANCH 1851 Taft Ave. Ext. Pasay City Tel. Nos. 50-47-95 and 59-19-75 LA UNION BRANCH Cor. Osmena & Quezon Sts. San Fernando, La Union Tel. Nos. 91 & 93 LAOAG CITY BRANCH Ventura Bldg., Bonifacio St. Laoag City Tel Nos. 245 and 246 SORSOGON BRANCH Magsaysay St., Sorsogon Tel. Nos. 691 and 282 PROVINCIAL BRANCHES BACOLOD CITY BRANCH Araneta St., Bacolod City Tel. Nos. 2-26-68; 2-62-66 CEBU and 2-61-66 ILOILO CITY BRANCH Iznart cor. de Leon St. IJoilc City Tel. Nos. 45-41 and 45-51 LEGASPI CITY BRANCH Rizal cor. Mabini Sts. Legaspi City Tel. Nos. 431 and 428 CITY BRANCH 417-421 Manalili St. Cebu City 'Tel. Nos. 97-84-1 and 97-03-1 MEMBER: Philippine Deposit Insurance Corporation years. (e) The corporation (1) may refund to an insured bank any payment of as sessment in excess of the amount due to the corpo ration or (2) may credit such excess toward the payment of the assess ments until the credit is exhausted. Injunction (f) Any insured bank which fails to file any cer tified statement required to be filed by it in connec tion with determining the amount of any assessment payable by the bank to the corporation may be com pelled to file such state ment by mandatory in junction or other appro priate remedy in a suit brought for such purpose by the corporation against the bank and any officer or officers thereof in any court of the Philippines of competent jurisdiction in which such bank is locat ed. (g) The corporation, in a suit brought in any court of competent jurisdiction, shall be entitled to re cover from any insured bank the amount of any unpaid assessment law fully payable by such in sured bank to the corpo ration, whether or not such bank shall have filed any such certified statement and whether or not suit shall have been brought to compel the bank to file any such statement. Failure (h) Showed any insur ed bank fail or refuse to Sunday, May 31, 1970 BANKING SUPPLEMENT Page 15 pay any assessment re quired to be paid by such bank under any provision of this Act, and should the bank not correct such failure or refusal within thirty days after written notice has been given by the corporation to an of ficer of the bank, citing this subsection, and sta ting that the bank has failed or refused to pay as required by law the insured status of such bank shall be terminated by the board of directors. (i) Trust funds held by an insured bank in a fi duciary capacity whether held in trust or deposited in any other department or in another bank shall be insured like other forms of deposits, in an amount not to exceed PIO,000 for each trust estate, and when deposit ed by the fiduciary bank in another insured bank such trust funds shall be similarly insured to the fiduciary bank according to the trust estates re presented. Notice SECTION 7. (a) Any insured bank may, upon not less than ninety days’ written notice to the cor poration, and to the De velopment Bank of the Philippines if it owns or holds as pledges any pre ferred stock, capital notes, or debentures of such bank, terminate its status as an insured bank. Whenever the board of directors shall find that an insured bank or its di rectors or trustees have continued unsafe or un sound practices in con ducting the business of the bank or which have know ingly or negligently per mitted any of its officers PRUDENTIAL BANK Plaza Goiti, Manila Tel. Nos. 40-51-81 to 40-51-94 Cable Address: “PRUBANK” WE NOW HAVE 29 BANKING OFFICES THROUGHOUT THE PHILIPPINES TO SERVE YOU __ Metropolitan Branches Malate, Manila Espafia, Manila Legarda, Manila Divisoria, Manila Cavite City Cubao, Quezon City Grace Park, Caloocan City DEPOSITORY OF THE PHILIPPINES AND UNITED STATES GOVERNMENTS WORLDWIDE CORRESPONDENT RELATIONS or agents to violate any provisions of any law or regulation to which the insured bank is subject, the board of directors shall first give to the Central Bank of the Philippines a statement with respect to such practices or viola tions for the purpose of securing the correction thereof and shall give a copy thereof to the bank. Unless such correction shall be made within one hundred twenty days or such shorter period of time the Central Bank of the Philippines shall require, the Board of Di rectors, if it shall deter mine to proceed further, shall give to the bank not less than thirty days’ writ ten notice of intention to determine the status of the bank as an insured bank, and shall fix a time and place for a hearing before the board of direc tor or before a person de signated by it to conduct such hearing, at which evidence may be produced, and upon such evidence the board of directors shall make written findings which shall be conclusive. Unless the bank shall ap pear at the hearing by a duly authorized represen tative, it shall be deemed to have consented to the termination of its status as an insured bank. Violation If the board of directors shall find that any unsafe or unsound practice or violation specified in such notice has been establish ed and has not been cor rected within the time above prescribed in which to make such correction, the board of directors may order that the insured status of the bank be ter Makati, Rizal Pasig, Rizal Concepcion, Malabon, Rizal San Bartolome, Malabon, Rizal * Navotas Extension Office Laoag City Olongapo City Subic Bay, U.S. Naval Base, Subic Bay Angeles City * Main Branch * Extension Office Clark Air Base, Clark Field Cabanatuan City Dagupan City minated on a date subse quent to such finding and to the expiration of the time specified in such no tice of intention. The corporation may publish notice of such ter mination and the bank shall give notice of such termination to each of the depositors at his last add ress of record on the books at the bank, in such a manner and at such a time as the board of direc tors may find to be neces sary and may order for the protection of the deposit ors. No additions to any such deposits and no new depo sits in such bank made af ter the date of such termi nation shall be insured by the corporation, and the bank shall not advertise or hold itself out as having insured deposits unless in the same connection it shall also state with equal prominence that such ad ditions to deposits and new deposits made after such date are not so in sured. Such bank shall, in all other respects, be sub ject to the duties and obli gations of an insured bank for the period of two years from the date of such ter mination, and in the event that such rank shall be closed on account of in solvency within such pe riod of two years, the cor poration shall ’ have the same powers and rights with respect to such bank as in case of an insured bank. Termination (b) Not withstanding any other provision of law, whenever the board of directors shall deter mine that an insured banking institution is not Provincial Branches San Pablo City Naga City Tacloban City Cebu City Mactan Air Base, Lapulapu City Bacolod City Davao City * Main Branch ♦ Extension Office . engaged in the business of receiving deposits, the corporation shall notify the banking institution that its insured status will terminate at the ex piration of the first full semi annual assessment period following such no tice. (c) Whenever the lia bilities of an in sured bank for deposits shall have been assumed by another insured bank or banks, the insured sta tus of the bank whose lia bilities are so assumed shall terminate on the date of receipt by the cor poration of satisfactory evidence of such assump tion with like effect as if its insured status had been terminated on said date by the board of di rectors after proceedings under sub-section (a) of this section: Provided That if the bank whose liabilities are so assumed gives to its depositors no tice of such assumption within 30 days after such assumption takes effect, by publication or by any reasonable means, in ac cordance with regulations to be prescribed by the board of directors, the in surance of its deposits shall terminate at the end of six months from the date such assumption takes effect. Such bank shall be subject to the du ties and obligations of an insured bank for the pe riod its deposits are in sured: Provided, further, That if the deposits are assumed by a newly in sured bank, the bank whose deposits are as sumed shall not be re quired to pay any assess ment upon the deposits which have been so as sumed after the semian nual period in which the assumption takes effect. Powers SECTION 8. The corpo ration as a corporate ;x>dy shall have the power— First. — To adopt and use a corporate seal. Second. — To have suc cession until dissolved by an Act of Congress. Third. — To make con tracts. Fourth. — To sue and be sued, complain and defend, in any court of law in the Philippines. All suits of a civil nature to which the'corporation shall be a part shall be deemed to arise under the laws of the Philippines. No attachment or execu tion shall be issued ag ainst the corporation or its property before final judgment in any suit, ac tion, or proceeding in any court. The board shall de signate an agent upon whom service of process may be made in any pro vince or city or jurisdic tion in which any insured bank is located. Fifth. — To appoint by its board of directors such officers and employes as are not otherwise provi ded for in this Act, to de fine their duties, fix their compensation, require bonds of them and fix pe nalty thereof and to dis miss such officers and employes for cause. Sixth. — To prescribe, by its board of directors, by-laws not inconsistent with law, regulating the manner in which its ge neral business may be conducted, and the privi leges granted to it by law may be exercised and en joyed. Seventh. — To exercise by its directors, or duly authorized o f f i cers or agents, all powers speci fically granted by the provisions of this Act, and such incidental powers as shall be necessary to car ry on the powers granted. Eight. — To make exa minations of and to re quire information and re ports from banks, as pro vided in this Act: Provi ded, that any examina tion shall be made simul taneously with the exa mination by the depart ment of the Central Bank conducting examinations of banks: (As amended by R.A. No. 6037, approved Aug. 4, 1969) Ninth. — To act as re ceiver. Tenth. — To prescribe by its board of directors such rules and regula tions as it may deem ne cessary to carry out the provision of this Act. Use of Mails SECTION 9. (a) The board shall administer the affair of the corpora tion fairly and impartial ly and without discrimi nation. The corporation shall be entitled to the free use of Philippine mails in the same manner as the other offices of the national government. (b) The board shall ap point examiners who shall have power, on behalf of the corporation to exam ine any insured bank or any bank making appli cation to become an in sured bank, whenever in the judgment of the board of directors an examina tion of the bank is neces sary. (c) Each insured bank shall make to the corpo ration reports of condi tion in such form and at such times as the board of directors may require such reports to be publish ed in such manner, not inconsistent with any ap plicable law, as it may di rect. Every such bank which fails to make or publish any such report within such time, not less than five days, as the board may require, shall be subject to a penalty of not more than PlOO for each day of such failure recoverable by the corpo ration for its use. Access (d) The corporation shall have access to re ports of examination made Page 16 NANKING SUPPLEMENT Sunday, May 31, 1970 by, and reports of condi tion made to the Superin tendent of Banks or the Governor of the Central Bank, and the Superin tendent of Banks or the Governor of the Central Bank of the Philippines shall also have access to reports of e x a mination made on behalf of, and re ports of condition made to the corporation. (e) The members of the board and the officers and employes of the corpora tion are prohibited from revealing any informa tion relating to the condi tion or business of any insured bank and any member of the Board, of ficer or employe of the corporation violating this provision shall be held lia ble for any loss or injury suffered by the corpora tion. -SECTION 10. (a) A per manent insurance fund in the amount of 1*5,000,000 to be appropriated from the General Fund is here by created to be used by the corporation to carry out the purposes of this Act: Provided, That the maximum amount of the insured deposit of any depositor shall be P10,000. (b) Foi the purposes of this Act an insured bank shall be deemed to have been closed on account of insolvency in any case in which it has been closed for the purposes of liqui dation without adequate provision being made for payment of its depositors. Insolvency (c) Whenever an in sured bank shall have been closed on account of insolvency, payment of the insured deposits in such bank shall be made by the corporation as soon as possible either (1) by cash or (2) by ma king available to each de positor a transferred de posit in another insured bank in. an amount equal to the insured deposit of such depositor: Provided, That the corporation, i±i its discretion, may re quire proof of claims to be filed before paying the insured deposits, and that in any case where the corporation is not satis fied as to the validity of a claim for an insured de posit, it may require the final determination of a court of competent juris diction before paying such claim. (d) The corporation, upon the payment of any depositor as provided for in subsection (c) of this section shall be subrogat ed to all rights of the de positor against the closed bank to the extent of such payment. Such sub rogation shall include the jight on the part of the corporation to receive the same dividends from the proceeds of the assets of such closed bank and re coveries on account of stockholders* liability as would have been payable Sunday, May 31; 1970 to the depositor on a claim for the insured de posit, but such depositor shall retain his claim for any uninsured portion of his deposit. Payment SECTION 11. (a) Pay ment of an insured depo sit to any person by the corporation shall dis charge the corporation, any payment of a trans ferred deposit to any per son by the new bank or by an insured bank in which a transferred depo sit has been made avail able shall discharge the corporation and such new bank or other insured bank, to the same extent that payment to such person by the closed bank would have discharged it from liability for the in sured deposit. (b) Except as otherwise prescribed by the board, neither the corporation nor such other insured bank shall be required to recognize as the owner of any portion of a deposit appearing on the records of the closed bank under a name other than that of the claimant, any per son whose name or inte rest as such owner is not disclosed on the records of such closed bank as part owner of said deposit, if such recognition would increase the aggregate amount of the insured de posits ir. such closed bank. (c) The corporation may withhold payment of such portion of the insured de posit of any depositor in a closed bank as may be re quired to provide for the payment of any liability of such depositor as a stockholder of the closed bank, oi of any liability of such depositor to the closed bank or its receiver, which is not offset against a claim due from such bank, pending the deter mination and payment of such liability by such de positor or any other perso'n liable therefor. 3 Months Notice (d) If, after the corpo ration shall have given at least three months notice to the depositor by mail ing a copy thereof, to his last known address ap pearing on the records of the closed bank, any de positor in the closed bank shall fail to claim his in sured deposit from the corporation within eigh teen months after the Monetary Board of the Central Bank of the Phi lippines or the proper court shall have ordered ’ the conversion of the as sets of such closed bank into money, all rights of the depositor against the corporation with respect to the Insured deposit shall be bared, and all rights oi the depositor against the closed bank and its shareholders or the receivership estate to which the corporation may have become subrogated, shall thereupon revert to the depositor. SECTION 12 (a) Money of the corporation not otherwise employed shall be invested in obligations of the Republic of the Philippines or in obliga tions guaranteed as to principal and interest by the Republic of the Philip pines. (As amended by R. A. No. 6037, approved Aug. 4, 1969) (b) The banking or accounts of the corpora tion shall be kept with the Central Bank of the Philippines, with the Phi lippine National Bank, or with any other designa ted as depository or fiscal agent of the Government CB Loan SECTION 13. The cor poration is authorized to borrow from the Central Bank of the Philippines and the Central Bank is authorized and directed to loan the corporation on such terms as may be fixed by the corporation and the CB, such funds as in the judgment of the board of directors of the corporation are from time to time required for insu rance purposes including those provided for in Sec tion 12(c) not exceeding in "he aggregate of one hundred million pesos outstanding at any one time: Provided. That the rate of interest to be charged in connection Tel. Nos. — 40-70-11 to 40-70-37 DIVISORIA BRANCH 632 M. de Santos Manila Tel. Nos. 48-55-97 & 48-58-08 QUIAPO BRANCH 132 Echague St., Manila Tel. No. 47-98-00 ARRANQUE BRANCH 733 T. Alonzo St., Manila Tel. No. 47-45-36 MAKATI BRANCH 215 Buendla Ave., Makati, Rizal Tel. Nos. 88-00-45 & 88-58-67 TONDO BRANCH 753 Claro M. Recto Ave., Tondo, Manila Tel. No. 21-81-83 DAVAO BRANCH 883 Claro M. Recto Davao City Tel. Nos. 7.-85-91 — 7-73-51 PASAY BRANCH 212 Llbertad St., Pasay City Tel. Nos. 80-58-89 & 80-81-90 PACO BRANCH 1635 Dart St., Paco, Manila Tel. No. 50-55-24 SOLER BRANCH 1087 Soler St., Manila Tel. No. 21-72-73 ERMITA BRANCH 1137 A. Mablnl St., Manila Tel. No. 59-58-79 . MAGDALENA BRANCH 970 Magdalena St., Manila Tel. No. 40-70-11 Local 222 CEBU CITY BRANCH Cor. F. Gonzales & Magallanes Sts. Cebu City Tel. No. 47-94 COMPLETE BANKING FACILITIES The Bank that Is at your Service Always in all ways MEMBER: Philippine Deposit Insurance Corporation with any loan made pur suant tn this section shall not be less than the cur rent average rate on out standing marketable and non-marketable obliga tions of the Republic of the Philippines as of the last day of the month pre ceding the making of such loan. Any such Ioan shall be use^ by the corporation solely in carrying out its functions with respect to such insurance. (As amended by R.A. No. 6037, approved Aug. 4, 1969), SECTION 14. With the approval of the President of the Philippines, to issue b<nds, debentures, and other obligations whenever its capital or funds are not sufficient to meet its obligation to depositors whose deposits are insured; Provided, that the board of directors shall determine the inte rest rates, maturity and other requirements of said obligations; Provided, further, that the corpora tion shall provide for ap propriate reserves for the redemption or retirement of saia obligations. All notes, debentures, bonds, or such obligations issued by the corporation shall be exempt from taxation. (As amended by R.A. No. 6037, approved Aug. 14, 1969) SECTION 15. (a) The corporation shall annual FOREIGN BRANCH HONG KONG BRANCH 4 Duddell St. Hong Kong Tel. H 24-30-31 DOMESTIC BRANCHES ly make a report of fts operations to Congress as soon as practicable after the 1st day of January each year. Audit (b) The financial tran sactions of the corpora tion shall be audited by the General Auditing Of fice in accordance with the principles and proce dures applicable to com mercial corporate transac tions and under such rules and regulations as may be prescribed by the auditor general. (c) A report of the au dit. for each fiscal year ending on June 30 shall be .iade by the auditor general to Congress not later than 15 following the close of such fis cal year. On or before Dec. 15 following such fiscal year, the auditor ge neral shall furnish the corporation a short form report showing the finan cial position of the corpo ration at the close of fis cal year. Display SECTION 16. (a) Every insured bank shall display at each place of business maintained by it a sign or signs, and shall include a statement to the effect that its deposits are in sured by the corporation' in all of its advertisement: Provided, That the board of directors may exempt from this requirement adBANKING SUPPLEMENT J Wg e 17 vertlsements which do not relate to deposits or when it is impractical to include such statement therein. 1. The directors and of ficers of any bank, corpo ration, partnership or any other company perform ing banking functions in the Philippines not in sured under the provi sions of this Act, which shall in any manner, ad vertise or hold itself out as having insured status for the purpose of making it appear that its depo sits are insured with the corporation. 2. The directors and of ficers of a bank whose in sured status had already been terminated, if such Your peso can grow with DBP PROGRESS BONDS they earn 7% yearly interest tax-free! 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DBP PROGRESS BONDS ARE LIQUID - THEY MAY BE CASHED ANYTIME, ANYWHERE! Other forms of Investment may tie up your capital indefi nitely. Not so with DBP Pro gress Bonds. Although the bonds (registered or bearer) of P100, PT.OOO, andP10,000 have a term of 10 years, they may be cashed any time (at the holder's option and for a small service charge) at DBP or any of its many service agencies. In case you should need money in a hurry, therefore, DBP Progress Bonds are easy to convert into cash I MORE LIQUID! DBP PROGRESS BONDS ARE FULLY GUARANTEED ABSOLUTELY NO RISK INVOLVED! DBP Progress Bonds are fully backed by the entire resources of the Development Bank of the Philippines. They also carry • the unconditional guarantee of the Government of the Philip pines! SAFER! UNIQUE COLLATERAL VALUE! DBP Progress Bonds can be used as collateral with no fur ther need for evaluations or QUICKER LOANS! 4__ h DtVILOFMINT BANK OF THE PHILIPPINES rw'rttPfcvito. Mu-* bank shall continue to advertise in any manner or hold itself out as hav ing insured deposits, un less in the same connec tion, it shall also state with the same prominence that additional and/or new deposits made after the effective date of ter mination of its insured status are no longer in sured. Fraudulent Use 3. Any person, who knowing the purpose for which the official sign, advertising state ment and/or emblem, as duly Diescribed by the board of directors of the corporation is to be used, reproduces or supplies such sign, advertising statement and/or emblem or a colorable imitation thereof, for the use of a bank not insured under the provisions of this Act, to enable such bank to fraudulently use the same in connection with the advertising of its services. (b) No insured bank shall pay any dividends on its capital stock or inteiest on its capital notes or debentures (if such in terest is required to be paid only out of net pro fits) or distribute any of its capital assets while it remains in default in the payment of any assess ment due to the corpora tion; ana any director or officer of any insured bank who paiticipates in the declaration or payment of any such dividend or interest or in any such distribution shall, upon conviction, be fined not more than Pl,000 or im prisoned not more than one year, or both: Provi ded, That if such default is due to a dispute be tween the insured bank and the corporation over the amount of such as sessment, this subsection shall not apply, if such bank shall deposit securi ty to the corporation for payment upon final deter mination of the issue. (c) Without prior writ ten consent by the corpo ration; no insured bank shall (1) merge or conso lidate with any non insured bank or institu tion or convert into a non-insured bank or insti tution or (2) assume lia bility to pay any deposits made in, or similar liabi lities of, any non-insured bank or institution or (3) transfer assets to any non-insured bank or ins titution in consideration ' of the assumption of lia bilities for any portion of the deposits made in such insured bank. Indemnity (d) The corporation may require any insured bank to provide protec tion and indemnity against burglary, defalca tion, and other similar in surable losses. Whenever any insured bank refuses to comply with any such requirement the corpora tion may contract for such protection and in demnity and add the cost thereof to the assessment otherwise payable by such bank. (e) Any insured bank which willfully fails or re fuses to file any certified statement or pay any as sessment required under this act shall be subject to a penalty of not more than P100 for each day that such violations con tinue, which penalty the corporation may recover for its use: Provided, That this subsection shall not be applicable under the circumstances stated in the provisions of subsec tion (b) of this section. SECTION 17. Except with the written consent of the corporation, no person shall serve as a di rector, or employe of an insured bank who has been convicted, or who is hereafter convicted, of any criminal offense in volving dishonesty or a breach of trust. For each willful violation of this prohibition, the bank in volved shall be subject to a penalty of not more than P100 for each day this prohibition is violat ed, which the corporation may recover for its use. SECTION 18. If any provision or section of this Act or the application thereof to any person or circumstance is held inva lid, the other provisions or sections of this Act, in the application of such provisions or section to other persons or circum stances, shall not be af fected thereby. SECTION 19. All acts or parts of Acts and execu tive orders, administrative orders, or parts thereof which are inconsistent with the provisions of this Act are hereby repealed. SECTION 20. This Act shall take effect upon ap proval. The Philippine De posit Insurance Corpora tion shall commence busi ness upon organization of the board of directors and certification by the Trea surer of the Philippines that the Permanent Insu rance Fund has been ap propriated. Page 18 BANKING SUPPLEMENT Sunday, May 31, 1970 Need a “prescription” for investment results? Comtrust IA/MS" brings fast relief to most 'investors' “maladies”. ‘’Comtrust INVESTMENT ADVISORY/MANAGEMENT SERVICE You could be suffering from any one or more of these nag^ ging “symptoms”: • Deficiency in, or absence of, specific investment objectives; • Not able to give adequate time to investment activities;; • Feeling of not having the ne cessary skills and/or experience for handling investment prob lems; • Occasional travel fever which hampers continuity of invest ment management; • Personal or business facilities not geared along investment specialization. Comtrust Investment Advisory/ Management Service (IA/MS) relieves you of the problems of managing your investments^, In an Investment Advisory ac count, Comtrust evaluates all your requirements, helps you set up your investment portfolio with your cash on hand or analyzes your present investment portfolio, formulates and submits to you a plan which will best attain your investment objectives. Thereafter, your investment port folio is reviewed on a continuing basis and recommendations to hold, buy, or sell certain securities are submitted. Comtrust recommends investment changes, but does not take invest ment action without your approv al You retain full control of your portfolio. On the other hand, Comtrust's Investment Management Service relieves you of the difficult task of investment decision-making. Since Comtrust assumes full dis cretion, swift implementation, if need be, is effected in cases where developments in the money and stock markets affect any of your, security holdings. Behind Comtrust's IA/MS is a full complement of economic re searchers, investment analysts and portfolio managers, all ex perienced in their respective areas of specialization. They can do a thorough job for you. You should know more about Comtrust's IA/MS. Available to individuals, estates, employee ben-, efit funds, corporations, founda tions, investment clubs; educa tional, charitable, religious and other institutions. Send for an IA/MS portfolio manager for a briefing. COMTRUST I YOUR f FULL i ’service! RANH | Head Office: Ayala Ave., Makati, Rizal Branches: Greater Manila Area • San Fernando, Pampanga • Cebu City • Davao City • Bislig, Surigao del Sur Deposits insured by Philippine Deposit Insuranep Corporation Sunday, May 31, 1970 BANKING SUPPLEMENT Page 19 ALL DEPOSITS ARE INSURED WITH THE PHILIPPINE DEPOSIT INSURANCE CORPORATION 77.096 88„OO2 1O9.TI2 our depositors increase everyday