Facilitating Bank Mergers or Consolidations

January 29, 1973

PRESIDENTIAL DECREE NO. 117

FACILITATING BANK MERGERS OR CONSOLIDATIONS

WHEREAS, the Government is currently engaged in instituting vital reforms in the banking system to enable it to play a more effective role in the socio-economic development of the country; cd i

WHEREAS, as a means of further promoting the financial stability and capacity of the different banking units, it is imperative that incentives be provided to encourage bank mergers or consolidations;

WHEREAS, to encourage bank mergers or consolidations, Presidential Decree No. 71 dated November 29, 1972, in amending certain provisions of the General Banking Act, exempts merged or consolidated banks from the application of Section 28 of the Corporation Law (Act No. 1459, as amended), which limits the number of directors in a corporation;

WHEREAS, other provisions of the Corporation Law tend to restrict or impede bank mergers or consolidations; cd i

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers in me vested by the Constitution as Commander-in-Chief of the Armed Forces of the Philippines, and pursuant to Proclamation No. 1081, dated September 21, 1972, Proclamation No. 1104 dated January 17, 1973, and General Order No. 1 dated September 22, 1972, as amended, in order to facilitate bank mergers or consolidations, do hereby order that this Decree be adopted as part of the law of the land.

SECTION 1. For the sole purpose of facilitating bank mergers or consolidations duly approved by the Monetary Board of the Central Bank of the Philippines, any bank may merge or consolidate with another bank and the capital stock of a bank may be increased to the extent necessary to effect such merger or consolidation by the affirmative vote of the stockholders representing at least a majority of the subscribed capital stock in a stockholders' meeting called for the purpose, notwithstanding the provisions of Section 28 ½ and 17 of the Corporation Law (Act No. 1459, as amended).

SECTION 2. This Decree shall take effect immediately and shall remain in force for a period of three (3) years from date hereof.

DONE in the City of Manila, this 29th day of January, in the year of Our Lord, Nineteen Hundred and Seventy-Three. acd