Declaring The Banking Industry As Indispensable To The Growth Of National Economy And For Other Purposes
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Declaring The Banking Industry As Indispensable To The Growth Of National Economy And For Other Purposes
Presidential Decree No. 1738
September 17, 1980
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Summary of Presidential Decree No. 1738Declaring the Banking Industry as Indispensable to the Growth of National Economy
- The banking industry is declared indispensable to the growth of the national economy. (Section 1)
- Gains from the following sales or exchanges of property for 5 years from the decree's approval shall not be subject to tax:
• Gains from merger or consolidation where: (i) a bank, non-bank financial intermediary or finance company exchanges property solely for stock in another bank, non-bank financial intermediary or corporation organized primarily for owning equity in banks; and (ii) a shareholder exchanges stock in a bank, non-bank financial intermediary or finance company solely for stocks of another bank, non-bank financial intermediary or corporation organized primarily for owning equity in banks; provided the shares are not disposed of within 5 years from issuance, except in case of death. (Section 1(a))
• Gains from disposition of property, real or personal, where the proceeds are invested within 6 months in new issues of capital stock of banks, non-bank financial intermediaries existing as of the decree's approval, or a corporation organized primarily for owning equity in banks; provided the disposition and investment are registered, and the shares are not disposed of within 5 years from issuance, except in case of death. (Section 1(b))
• Gains from exchanges of property, real or personal, for new issues of capital stock in banks or non-bank financial intermediaries existing as of the decree's approval, or a corporation organized primarily for owning equity in banks, if it increases the paid-in capital; provided the shares are not disposed of within 5 years from issuance, except in case of death. (Section 1(c))
- Provisions for stamping shares as "EXEMPT UNDER PRESIDENTIAL DECREE NO. ________" and penalties for unauthorized transfer. (Section 1(i))
- Banks or non-bank financial intermediaries resulting from a merger or consolidation after April 1, 1980 are considered existing as of the decree's approval. (Section 1(ii))
- Corporations organized primarily for owning equity in banks must register and be authorized by the Central Bank of the Philippines. (Section 1(iii))
- Definitions of "bank", "non-bank financial intermediary", "quasi-banking functions", and "finance companies". (Section 2)
- The Ministry of Finance shall promulgate implementing rules and regulations, including provisions for independent appraisal of property sold, transferred or exchanged. (Section 3)
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Declaring The Banking Industry As Indispensable To The Growth Of National Economy And For Other Purposes
Presidential Decree No. 1738
•September 17, 1980
MALACAÑANGM a n i l a
PRESIDENTIAL DECREE No. 1738
DECLARING THE BANKING INDUSTRY AS INDISPENSABLE TO THE GROWTH OF NATIONAL ECONOMY AND FOR OTHER PURPOSES
WHEREAS, it is recognized that the attainment of development goals for industry and agriculture depends, to a large extent, on the capability of banks to sustain the investment and credit requirements of industrial and agricultural projects;
WHEREAS, to insure that funds are available for investment and credit requirements, there is a need to increase the resources of banks; and
WHEREAS, to create the ideal climate conducive to the increased capitalization of banks, certain changes in the fiscal regime appeal warranted;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby order and decree:
Section 1. The banking industry is hereby declared as indispensable to the growth of national economy and, the provisions of the National Internal Revenue Code to the contrary notwithstanding, gain realized from the following sales or exchanges of property for a period of...
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