Atty. Jose A. Bernas

April 28, 2003 SEC OPINION NO. 13-03 Atty. Jose A. Bernas Bernas Law Offices 8/F Raja Sulayman Bldg. 108 Benavidez Street, Legaspi Village Makati City Dear Atty. Bernas : This relates to your letter dated 11 April 2003 reiterating your request for opinion on issues pertaining to Banco Filipino. It is your view that Banco Filipino is not engaged in the real estate business and therefore should not be permitted to receive real estate as payment for subscription of its stockholders, following Section 62(2) of the Corporation Code; to wit: Consideration for stocks Stocks shall not be issued for a consideration less than the par or issued price thereof. Consideration for the issuance of stock may be any or a combination of any two or more of the following: (1) ... (2) Property, tangible or intangible, actually received by the corporation and necessary or convenient for its use and lawful purposes at a fair valuation equal to the par or issued value of the stock issued; It is our view that when property is received by the corporation in payment of the subscription of its stockholders, the same has been done in compliance with the requirements of the law, i.e. that the property has been determined as necessary and convenient for the use and lawful purposes of the corporation by the Board of Directors, and the regulator having primary jurisdiction over their purposes and activities pursuant thereto. In the case of Banco Filipino, it must be presumed that the same has been determined by the Bangko Sentral ng Pilipinas (BSP).Whether said properties are necessary and convenient for the bank to further its operations is for the BSP and not the SEC to determine. It must be remembered, that even before a bank can be duly registered as a corporation with the Commission, a prior favorable endorsement from the BSP is required by law to enable the SEC to issue its Certificate of Registration of its Articles of Incorporation. This clearly confirms that primary jurisdiction belongs to the BSP and its registration with the Commission is only ministerial. In the light of all the foregoing, we hope we have made it clear that similar issues to what you have brought before us and affecting the pursuance of the purposes of the corporation and its activities will have to be directed to the Bangko Sentral ng Pilipinas and not with this office. We hope that this will terminate the submission of this line of queries before this Commission. IcHDCS Very truly yours, (SGD.) VERNETTE UMALI PACO General Counsel