Amending the Last Paragraph of Letter of Implementation No. 53 Dated December 27, 1976

EXECUTIVE ORDER NO. 691 May 15, 1981

AMENDING THE LAST PARAGRAPH OF LETTER OF IMPLEMENTATION NO. 53 DATED DECEMBER 27, 1976

WHEREAS, production loans obtained by farmer-members of Samahang Nayons are subject to a compulsory 3 percent deduction as contribution to the Barrio Savings Fund;

WHEREAS, the principal source of equity capital of cooperative rural banks is the Barrio Savings Fund;

WHEREAS, there is a need to increase the equity capital of existing cooperative rural banks and to accelerate the establishment of new ones throughout the Philippine countryside;

WHEREAS, under present regulations, withdrawals from the Barrio Savings Fund are not allowed if such withdrawals will endanger the liquidity position of the rural banks concerned;

NOW, THEREFORE, pursuant to the provisions of Sec. 11 of PD 175, the proviso of the last paragraph of LOI No. 53 dated December 27, 1976 is hereby amended to read as follows:

"Provided, That the withdrawal of the Barrio Savings Fund as herein specified shall be unrestricted: Provided further, That in the case of a...

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Summary of Executive Order No. 691

Provisions on Barrio Savings Fund Withdrawals:
- Farmer-members of Samahang Nayons are subject to a compulsory 3% deduction from production loans as contribution to the Barrio Savings Fund. (Whereas clause)
- The Barrio Savings Fund is the principal source of equity capital for cooperative rural banks. (Whereas clause)
- The order aims to increase equity capital of existing cooperative rural banks and accelerate establishment of new ones. (Whereas clause)
- Withdrawals from the Barrio Savings Fund were previously not allowed if it endangered the liquidity position of rural banks. (Whereas clause)

Amended Provisions:
- Withdrawals from the Barrio Savings Fund shall be unrestricted. (Section 1)
- For Samahang Nayon members with outstanding loans, withdrawal shall be allowed only up to 50% of the member's deposit with the rural bank. (Section 1)
- If the rural bank's liquidity position is endangered, the Central Bank of the Philippines shall lend under its emergency Credit Operation the amounts of the Barrio Savings Fund defined in the order, after ascertaining that the bank is not insolvent and has realizable assets to secure the advances. (Section 1)
- The proceeds of the Barrio Savings Fund withdrawal shall be directly remitted or deposited with the existing cooperative rural bank, or deposited with the nearest Philippine National Bank branch in provinces without cooperative rural banks. (Section 1)