Further Amending Section Eighty-Eight Of Republic Act Numbered Two Hundred Sixty-Five, As Amended, Otherwise Known As The Central Bank Act

Case Overview and Summary

Summary of Presidential Decree No. 1282

Amending Section 88 of Republic Act No. 265 (Central Bank Act)

- Grants the Central Bank of the Philippines greater flexibility in using its credit facilities to augment medium and long-term funds for economic development. (Section 1)

- Allows the Central Bank to grant loans or advances to banking institutions engaged in long-term financing under special circumstances where the Monetary Board deems it advisable to promote or facilitate their lending operations. (Section 1, Subsection A)
• The loans or advances shall be granted against the pledge or assignment of payments, installments, or amortizations of the borrowers of these banking institutions.
• The Monetary Board shall prescribe the ceilings on the loans or advances based on the pledged or assigned payments, installments, or amortizations.
• The Central Bank shall finance these loans from non-inflationary sources and establish additional safeguards as deemed proper.
• The Central Bank shall first ascertain that the pledged or assigned payments, installments, and amortizations are not currently in arrears and are related to credit operations adequately secured by mortgages.
• The mortgages shall be assigned to the Central Bank.