4F Banking Abella Notes (1) 1766871109700674318

B A N K I N G – A B E L L A N O T E S 4 F 2 0 1 7 - 2 0 1 8 |1
NEW CENTRAL BANK ACT
BRIEF HISTORY: BANGKO SENTRAL NG PILIPINAS
So let’s talk about the New Central Bank Act… the title of the law is New Central Bank
Act. Now, you might be wondering “bakit ganun yung pangalan ng law na ‘yon, New
Central Bank, bakit meron bang luma?” Yes.
Philippines got its independence from the USA on July 4, 1946. At that time merong
privately owned bank, Bank of PI, which was created during Spanish times kaya nga
ang pangalan talaga dati nyan “Banko de las Islas Filipinas”. During American
occupation, the Philippine government created its own bank, and it’s now called
Philippine National Bank. Yung PNB that we now know was created during American
occupation. Kaya lang, yun eh ordinaryong banko, ang may ari nga lang Philippine
government. ‘Kay ngayon, uhh banking has to be regulated (it has to be) supervised
because public interest is involved. Alright. So after Philippines got its independence
from the US, the legislator created a central bank and it was called Central Bank of the
Philippines and that was in 1948. Ngayon Central Bank of Philippines became bankrupt
and certainly it’s very embarrassing for a country, for any country, to have a bankrupt
central bank. Isipin mo ‘yung supposedly government regulator dapat siya yung
magsasabi, “O, ganito kayo mag-babanko ah,” siya bankrupt? So walang moral
ascendancy over the banking system.
So what the legislators did was, it abolished Central Bank of the Philippines but as every
country needed a central monetary authority, right away it had to create a new one. And
the new one is called ‘Banko Sentral ng Pilipinas’. Kay? Yung iba ang akala, ano lang
yan, change of name kasi karamihan naman ng trabaho ng legislature natin, change of
name. Change name of street, change name of hospital, change name of school building,
ayun. Mapapansin niyo karamihan ng legislation change of name. ‘Kay? Dapat
magkaroon ng law, no more changing of name, frankly ha, frankly. Noong maging
abogado ako wala pa yung compilations, di pa uso yan. So in short my plan was to
compile different laws kaya ang ginawa ko nagresearch nako. Aba eh pagtingin ko ng
bawat law ang title, ‘An act changing the name of a hospital’, ‘An act changing the name
of an elementary school’, kaya sabi ko “hay naku saying lang oras ko ditto”. So I
abandoned the idea, kay? Ngayon ang akala nga nila pinalitan lang ng pangalan yung
Central Bank of the Philippines, hindi, BSP (Banko Sentral ng Pilipinas) is an entirely
different entity and it was created to replace Central Bank of the Philippines, ‘kay?
Karamihan kasi akala palit pangalan lang because of nationalism, kasi nga naman
karamihan ng government offices ang pangalan Filipino na kaya lang yung Central Bank,
Central Bank pa rin kaya sabi nila pinalitan lang pangalan. It’s an entirely different
entity. ‘Kay? So yung dating Central Bank of the Philippines inabolish talaga yon and a
new one had to be created because every country need a central monetary authority. Eh
di officially it is Banko Sentral ng Pilipinas, briefly BSP.
*Joke alert*
So if you are going to read newspapers, particularly in business sections pag nakita
niyong BSP, yung BSP stands for Banko Sentral ng Pilipinas. Kaya lang kung makikita
niyo yung main section, makikita niyo yung BSP, baka yung BSP -- Boy Scout of the
Philippines. Hehehe. Sino president ng Boy Scout of the Philippines? Si Binay. Kaya lang
parang mali ata di ba? Kasi yung organization BOY scout, eh si Binay SENIOR CITIZEN
scout (hehehe). Dapat irelinquish na yun sa mas bata, dapat sa boy.
MONETARY BOARD
Oh ngayon, BSP has a corporate existence so as it is a corporation, uh, it is managed by

a board. So how do you call the board that manages the BSP? It’s called the Monetary
Board. Kasi pag corporation, if it’s a stock corporation, we call the board the Board of
Directors. ‘Kay? If it is a non-stock corporation we call it a Board of Trustees. Kaya lang
pag-BSP, by law, Monetary Board. So similar to the managing body of Central Bank of
the Philippines, pareho yan, Central Bank of the Philippines, BSP, managing body it was
called a Monetary Board. ‘Kay? Kaya lang magkaiba ng composition. So what’s the
composition of a Monetary Board? Well they have 7 members, and included are BSP
governor, a cabinet member, and 5 fulltime directors from the private sector. 5 full time
directors from the private sector. Now you might be wondering ‘bakit ganun, may
pahabol pa from the private sector?’ The reason behind that qualification was to prevent
the Monetary Board from becoming a dumping ground of political (impacts?). Alam nyo
naman sa atin, kung ako naging president dahil natulungan mo ko ng husto at ikaw
naman natalo, kaya isang taon jobless ka. Kaya lang because you helped me win the
election, sabi ko ‘sige isang taon lang, then bigyan kita trabaho’. Then lets say the
opening is Director of the Monetary Board, kaya ang tanong ‘ikaw ba anong educational
attainment mo?’ Sabi mo ‘High school graduate ako’. Dahil high school graduate ka
pwede ka maging president ng Pilipinas di ba? Pero di ka pwede mag pulis. Ang tanong,
dahil pwede ka maging president ng Pilipinas, eh di pwede ka maging member ng
Monetary Board? Hindiii, kasi kulang ka sa qualifications. Isipin mo naman, policy
making yan para sa buong Pilipinas ipagkakatiwala mo sa High school graduate? Kaya,
not anybody can be a member of the Monetary Board and specifically the law says from
the private sector.
Pag sinabing private sector hindi naman necessarily from private corporation pwede din
from government owned and controlled corporations. So there was this at one time, a
president of Landbank or at one time you were a president of GSIS, general manager of
GSIS. Walang problema, you may be appointed as a full time director of the Monetary
Board. Ngayon, what is the regular term of governor as well as the full time director?
Regular term is 6 years. Ngayon kaya in-emphasize kasi there’s a possibility that
there may be vacancy baka naging vacant yung magiging governor or magiging director
and you are appointed to fill in the vacancy. Then your term shall only be the unexpired
term of your predecessor. So, regular term 6 years. Ngayon as to the regular term of
six years ang tanong: pagdating ng six years pagkatapos noon may the governor or a
director may be reappointed? Yes. Pwede. The governor as well as the full time director
may be reappointed but only once. Hindi pwedeng tuloy-tuloy. Ang reappointment
minsan lang. Okay? So, what is the maximum number of years that anybody may serve
the monetary board? 12 years. Yung una for regular term plus one reappointment.
Maliwanag?
Alright. Ngayon, there is a prohibition. Within a period of two years from the separation
from the monetary board, governor, director, for the next two years that person cannot
serve in any capacity in any corporation under the supervision of the monetary board.
So ano ba yang mga corporations na under the supervision of the monetary board? One,
syempre banks. And then we have what are commonly known as quasi-banks ito yung
mga tinatawag na investment houses. So pag may nagtatanong sa inyo, ano ba yung
example ng quasi bank? Ano ba talaga yan? Hindi yan bangko, para lang bangko kaya
nga quasi banks. Okay? Kasi nag papautang din yang mga yan. Kaya lang di naman
makatanggap ng deposits from the public kasi the law does not allow. Only such
corporations authorized by law to accept deposit from the public are considered banks.
Not because they are engaged in the lending business that you may be a bank. Hindi. So
ayun ang qualification ng isang bangko: Being authorized to accept deposits from the
public. Well we’ll talk about this later on.
Ngayon ano pa yung under the supervision of the monetary board? Syempre trust
companies. Oh kasama din under monetary board yung mga money changers. Oh
kasama rin, pawnshops. Ngayon merong mga nag papautang for substantial amounts
yet they’re not under the supervision of the monetary board. Kasama jan yung
tinatawag na financing companies and also lending investors. So not every person
engaged in the business of lending money could be under the supervision of the
monetary board. So, by express provision of other laws financing companies and lending
investors are not under the monetary board but SEC (Securities and Exchange
Commission). So with respect to financing companies and lending investors registration
– SEC regulation, SEC pa rin. Pag banko, quasi banks, trust companies registration SEC
regulation – monetary board. Oh malinaw? Alright we have to give examples. Dating
governor ng central bank yung nagtrain kay Tetangco, Gabriel Singson very effective
kaya lang expired na yung term niya dahil yung president he was replaced. Kaya ang
tanong san ba siya nag-punta? Kasi ganito, kung walang prohibitions kung ako may-ari
ng banko and Gabriel Singson ceased being governor imbitahan ko yan. Gov, pwede
bang ikaw na mag-administrate ng aking bangko, ano nalang ako chairman of the board.
And I’m willing to do that sacrifice kasi alam kong mahusay yan governor ng central
bank yan eh samantalang ako ordinaryong banko lang. Alright kaya di mo pwedeng
gawin because the law says that within a period of two years from separation from the
monetary board neither the directors nor the governors may serve in any capacity in any
corporation under the supervision of the monetary board. Except if he would be
representing the interest of the Philippine Government. Maliwanag?
FUNCTIONS OF THE BSP
Oh question: what are the functions of the BSP?
One of them issuance of currency. One function of the BSP is issuance of currency.
Another is management of money supply.
Another is supervision of the banking system.
Actually, the law says supervision but in reality, it's control. Kapag binasa mo 'yung law
nakalagay sa law, supervision. Kaya lang it's control. Kaya ko naman sinasabing it's
control kasi when you have the power to issue rules and regulation and enforce those
rules and regulation, you have the power of control.
Joke alert:
Kaya kung halimbawa ikaw husband. Sabi ng wife mo: Sweetheart gusto ko sana by
7:00 ng gabi nasa bahay ka na. Sabi mo, ikaw naman mabait ka. Kaya by 7:00 umuuwi
ka palagi. Then one day, one afternoon sabi ng friend mo. "Friend, ano tayo, one for the
road." Ikaw sabi mo: "Naku, hindi pwede, naghihintay si misis sa bahay." Sabi naman ng
friend mo sayo: "Oh, bakit ka pacontrol sa asawa mo?" Para hindi naman isipin..."Friend
hindi naman control 'yun, supervision lang 'yun. Kaya lang control 'yun.
Another function: Purchase of precious metal. Trading of precious metals.
'Yung mga malalaking mining company, 'yung kanilang production ng gold. San
binebenta 'yan? Dapat ibenta sa Central Bank lamang. Hindi pwede sa mga nag-aalahas.
'Pag nabili naman ng Central Bank, ibinibenta naman nila sa USA. Because USA needs
gold to backup dollars. 'Yung American Dollars backup by gold. Philippine Peso, no
backup. Just a written commitment. Kaya papansinin niyo nakalagay dun sa perang
papel natin, nakalagay 'dun: "Ito ay pananagutan ng Gobyerno ng Republika ng
Pilipinas." In English, this is an obligation guaranteed by the Republic of the Philippines."
Joke Alert:
Kaya mas matatag ang peso. Eh 'yung dollar 'pag binasa mo nga 'yung dollar 'di ba may
nakalagay ba 'dun: "In God, We Trust." Nananalig ba kayo 'dun? Hindi pinaninindigan.
One more: BSP represents the Philippine government in its international financial
dealings.
May dealing sa World Bank. May dealing sa IMF. 'Yan. And it is the BSP that represents
Philippine Government.
Let's talk about very basic matters.
What is your understanding of money? Sino ang graduate ng business? Accounting,

economics, finance, marketing. Sigurado, nagkaroon kayo ng subject na Finance 1. Sa
Finance 1, unang topic 'yan money. Tapos 'yung textbook diyan: Money, Credit and
Banking. Kaya ang tanong ano ang definition ng money?
Well, money is universally defined as any medium of exchange. Kung tatagalugin: kahit
na ano ginagamit sa palitan.
Oh, to illustrate the point, kailangan ko ng ballpen ngayon. Kasi may mga pipirmahan
ako, isusulat ako. And I notice that you are holding two identical looking ballpens. Ano
kayang brand niyan Panda? So sabi ko: "Friend, pwede bang mabili ko 'yung isa mong
ballpen. Meron kasi akong isusulat mamaya." Sabi mo: "Sige, walang problema." "Hindi,
ano, may konting akong problema. Hindi ko dala ang aking wallet." " ‘Di ba pagkakabili
mo dyan 15 pesos." "Oo, sir". "Eh walang akong 15 pesos, 'yan may dala akong credit
card." Alangan naman icrecredit card pa natin 'yung 15 pesos na 'yun? Sabi ko: "Pwede
ba," makiusap ka, "kunin ko yan. Ito ang pambayad ko bottled water. 'Di pa nabuksan
'yan ha. Ito pambayad ko sayo. Binili ko yan 15 pesos." Sabi mo: "Sige, sige." In short,
I've got the ballpen, I gave you this bottled water. In that transaction, this is money
because this was a medium of exchange. Ginamit sa palitan. Kinuha ko yung ballpen
kapalit ng bottled water. Malinaw? “yan ang ibig sabihin ng medium of exchange.
Maliwanag? And money could be anything.
Dun sa Papua New Guinea, kung ang Pilipinas until now ay underdeveloped, Papua New
Guinea is undeveloped. At least tayo underdeveloped, ibig sabihin may konting
development. E yung undeveloped e talagang wala. I read one issue of National
Geographic magazine, doon sa Papua New Guinea maraming mga tribesmen and these
people are not wearing clothes. Kaya yung mga lalaki doon, the only covered part of
their body is their chairman. Yun lang. Kaya yung cover doon ang tawag nila “Penis
Court”. Parang may patola diba, patola…yung patola kapag natuyo ‘yan pwede mo
tanggalin yung gitna, tapos i-itak ‘yan, yun yung mga ginagamit ng mga babae ______
kung tawagin. Kaya doon sa Papua New Guinea sa bundok pantakip ‘yan. E kung
makagat pa ng langgam ‘yan e masakit-ssakit yun.
Ngayon doon sa feature na ‘yun, doon pala sa lugar na ‘yun, if you want to marry yung
daughter of another tribesman, you have to buy. Alam niyo kung ano pambayad? Two
sacks of seashells. So, you might wonder anong klaseng seashells ‘yan. Yung ordinary,
sa Cebu yung ginagamit sa suka o yung mga ginagamit sa wind chimes, ‘yun. Kaya kung
meron sa inyo nag-a-ambisyon makakuha ng virgin, punta kayo sa Papua New Guinea,
magdala kayo ng sampung sako doon, e di makaka-limang virgin ka dun. E kasi ganun
yung practice sa kanila, you have to marry a virgin daughter of a fellow tribesman you
pay two sacks full of seashells.
So kapag sinabi na kahit na ano, kaya you cannot say that your wife is money kasi
pinagpalit mo na… medium of exchange ginamit mon a sa palitan. Nagpalit na ako ng
asawa. Sabi ko nga, ano not sino. Kaya your wife or your husband cannot be money.
Maliwanag? Because money is a medium of exchange.
Ngayon, how do you call Philippine money? Anong tawag sa Philippine money? Peso or
Piso? P-E-S-O o P-I-S-O? Actually ako minsan naguguluhan because as far sa the law is
concerned, Philippine money is called peso – PESO. Kaya lang kapag tiningnan mo ang
atin mga notes, walang nakalagay na peso dyan. Ang meron dyan isang daang piso,
dalawang daang piso… in short it is spelled as P-I-S-O. So it is not provided in the law.
Because in fact the law said ang nakalagay peso. Kuha kayo P20 bill sa wallet ninyo, and
you can see ang nakalagay p-i-s-o. Bakit? Well baka mga in-charge sa printing, taga-
Cebu. Kaya yung peso nagging piso.
O ngayon, ano ang official na symbol ng peso? Ano official symbol? Simply a capital
letter P, wala yung parang dalawang horizontal lines, wala na ‘yun. Yung ang dati. When
it was still Central Bank of the Philippines, the symbol of peso was capital P and after
that meron dalawang horizontal parallel lines, not anymore, okay? Ngayon, during those
days kapag gumagawa ng mga dokumento, they use typewriters. Ngayon yung mga
typewriters iba’t iba mga brand niyan. Diba doon sa first row (ng typewriter) yung iba
walang zero. Yung iba ang ginagamit na zero ay yung letter “o”. Alright, ngayon kapag
pinress mo yung shift lock merong figure sa ibabaw, yun kanya kanya na ‘yun. In short,
in one brand of typewriter merong key for peso sign. Maraming brand ng typewriters,
merong Underwood, merong Olympia, merong IBM meron pang brother, meron pang
Remington, meron pang Adler. Well as far as I remember because I was working in a
bank, noong panahong nasa bangko ako meron kaming typewriter ang brand ay
Remington, e yung Remington merong key for the peso sign. Ngayon yung ibang brands,
yung typewriters nila like Olympia, Underwood, yung mga brand na ‘yun walang peso
sign. So we improvise the peso sign. Ang ginawa namin dati, capital P, backspace
ngayon kung meron key for the equal sign strike over. Okay. P muna, atras, ngayon
kung may equal sign, pipindutin mo ngayon so strike over yun, so ang lalabas, P na may
equal sing. So improvise. Kaya lang, hindi lahat ng typewriters may equal sign. So yung
other brands, walang equal sign, walang peso sign kaya nag-improvise pa kami. So,
other way we had done it was capital P, backspace strike over slash. Kaya makita niyo
yung old documents, makikita niyo na pinaka-peso sign capital P tapos slash, ayun ang
peso. Nowadays meron kayong makikitang capital P kaya lang ang slash paganoon
*gestures \* , no parking. *class laughs*
O diba kala nyo peso rin yun. Kaya kung babasahin mo sa dyaryo and another financial
paper capital P capital H capital P which reads philippine peso kasi ang php na iyan ang
abrreviation ng peso sa Philippines. Kaya naman sinabing PhP kasi there are other
countries that are using peso as their currency. One is Mexico and the other is Argentina.
Meron pa isa. O malinaw?
How do you call a unit of peso? Unit or part of a peso is a centavo. And what is the
symbol of a centavo? Old and new law iisa. Small letter c walang slash. Yung may slash
cent. Eto yung sa Americano. Malinaw?
How many centavos are there in a peso? Pag tinatanong ko sa exam, kung ano ano
sinasagot. may sumasagot na 20, may 5, 10, minsan 4. Bakit four? Kasi apat na 25
cents para makabuo ng piso. Forgetting altogether yung isang bente singko na yun
that’s 25. Malinaw? So there are 100 centavos in a peso.
One of the first functions of BSP is issuance of currency. Kaya ang tanong what is your
understanding of currency? The word currency has two qualifications. First, you refer to
“Notes and coins issued by the BSP”. And the other is “in circulation”.
While the BSP may have issued the coins and notes But they may not qualify anymore
as currencies. Kasi dalawa na ang qualifications 1. Having been issued by the bsp and 2.
In circulation. Kaya ang tanong ngayon what does being in circulation mean? Alright
para masabi being in circulation- simply outside the vaults of the BSP. Notes and coins
are considered currency if they are outside the vaults of the BSP.
Oh ganito ha? Yung ating notes, yung kung tawagin natin ay perang papel, yung 100
pesos, 200, etc...they are already printed here. At ang printer, BSP. And the cost of
equipment 2 billion pesos. Ganoon kamahal ang printing equipment ng BSP. Alright.
Yung certificate of a corporation issued by SEC printed din ng BSP. yung mga passports,
bsp yan. Atsaka yung nga instruments showing indebtedness of the ph government.
Quality paper iyan. And these are printed-BSP. Ngayon, yung pag gamit ng printing
equipment— BSp cannot cope with the demand of printing kaya ang nangyari bsp
brought another one. Kaya dalawa na ngayon ang printing equipment ng bsp. Ang
printing equipment ng bsp each of them ay worth P2B. Oh kaya makikita mo naman ang
ating notes di ba? Ang hirap kopyahin nun. And daming security features unlike long
long before before ang pinaka secutiry features ng notes natin ay yung fibers lang.
meron blue may red.
Yung pera natin nung kabataan namin high school ako may one peso, 2 pesos walang
100 pesos nun. Pinakamalaki siguro ay P50. Ngayon kami pag walang magawa pag di
namin gusto teacher namin, ginagawa naming pansundot dun sa likod, kasi teacher
namin sulat ng sulat sa blackboard di ba. Kami ng classmates ko naglalaro lang kami.
Paramihan ng fiber na makukuha dun sa one peso. One peso dati note iyan. Kaya pag
pumapasok kami nagdadala kami ng karayom. Sinusungkit namin, paramihan kami ng
nakuhang red o kaya blue. But now since copying have been improved and the
technology had also been copied, can also be copied aba nadagdagan na ang security
features. Kaya ang ating pera sobra sobra ang security features. Although as published
in the newspapers a few days ago, may lumalabas sa atm, walang mukha. Iyon misprint
iyon. Kung meron kayong misprint. Dont be alarmed. Kung ang halaga ng inyong dapat
100 pesos kaya lang may misprint, keep the notes kasi mas mahal ang market value.
Kung may misprint kayo P100 nadyaryo, im willing to buy. Im willing to pay P500. Kasi
yung bili ko sa P500 mura pa rin iyon. Why? Kasi yung naging misprint nung panahon ni
gma naglabas ng P100 bills, nagkaron ng printing error, mali ang spelling ng arroyo
naging arrogo, kayo ba napapansin nyo ang nakaprint. Eh eto kaliit ng letra para
mabasa kailangan ng magnifying glass. Biglang napansin. Ayan may printing error, yung
arroyo naging arrovo.
Yung Arroyo naging Arrovo upon learning it yung Central Bank binalik. Eh maraming
nang lumabas. Maraming gusto magkaron nung Arrovo bills. Eh alam niyo kung
magkano yung presyo? P3,000.00 each samantalang denomination nun P100, times 30.
Kaya yung offer ko sa inyo kanina P500.00 maliit yun. Alam niyo basta anything
mechanical magkakaron at magkakaron ng kahit na minor na aberya. Ako minsan sa
mga serial number, maliit, Malaki. During the printing process meron at merong malilihis
diyan. So there may be times that you would see oh ito bat wala tong orang oh bat puti
itong part na to oh bat putol itong serial number. Pagnakakita kayo ng ganon itago ninyo
because that is very expensive. That is collector’s item. Kokonti lang ang meron dahil
konti, law on supply and demand. Low supply big demand tataas ang presyo. Yung
Arrovo notes nay un 100peso P3, 000 ang value ayaw magpatawad. San meron niyan?
Dun sa Megamall sa may 4th floor meron dung shop bilihan ng old monies. Eh ako
naman habang naghihintay wala pa yung kausap ikot ikot muna silip silip pag may
nakitang attractive tatanong kung muna kung magkano yan if I can afford I buy. Kaya
lang nung nakita yung P100 tapos presyo P3,000 sabi ko wag nalang sayang naman.
Alright ngayon, going back to printing. Sabi ko sa inyo currency refers to notes and coins
issued by BSP which and are in circulation. Pag nagprint ang BSP hindi lahat ng naiprint
lalabas agad. Marami diyan papasok lang muna sa vault ng BSP. And while inside the
vaults of the BSP yun ay money palang hindi pa siya currency because for it to be
considered currency dapat umiikot na. Yung salitang currency comes from the word
current and current is moving so if it is not moving it cannot be current and if it cannot
be current hindi pa siya currency. Kaya pag nasa loob pa ng vault ng BSP hindi
gumagalaw yon that is money but that is not currency. Kaya pag may mga luma na
dapat nang palitan, papalitan yan. Yung mga iwiwithraw from circulation that will be
demonetized hindi na pera yun. Dahil papalitan mo yan yung ilalabas that is currency.
Alright ngayon, yung notes natin while they are printed by the BSP yung materials niyan
are all imported. Actually that is an improvement kasi dati nung wala pang printing
equipment ang BSP ang mga notes natin ay all imported finished products at ang printer
dati England pa, kaya kung makikita niyo ang old notes yung mga before President
Marcos, why during his term? Makikita niyo printed in fine letters THOMAS LARUE. That’s
a company in England that prints notes of different countries. Kaya nga nagkaron na
tayo ng sariling equipment kaya lang the materials used in printing are still imported. We
still don’t have the technology of making materials that will be good for our currency.
Kaya nga there was a time some years ago, hindi pa katagalan. Budget deliberation BSP
submitted its budget. May isang congressman na nakapansin. Bat kaya ang laki ng
ginagastos nito for printing our notes. Kaya suggestion niya why not use local fibers?
Nung sinabi niyang local fibers nasa isip ko ano bang local fibers tinutukoy nito ang mga
local fibers natin usi o kaya pinya eh yung mga fibers nayan ilang beses mo lang gamitin
napupunit na, although meron naman tayong durable fiber Abacca. Kaya lang isipin mo
nalang gano naman kalaki ang Abacca. Meron tayong fibers kaya lang wala pa tayong
technology of converting these fibers into raw materials for use as our notes
By the way yung kung ating tawaging perang papel hindi yan papel. Fiber yan parang
tela yan similar to the handkerchief of women and if you want to test it ganito gawin
ninyo. Pag dating niyo sa bahay mamaya siyempre youre going to remove your shirt
kumuha ka ng 20 peso bill lagay mo sa bulsa tapos cut one paper with the size of 20
peso bill, I fold mo tapos pagtabihin mo sila. Tapos yung shirt mo ilagay mo sa washing
maching then let it spin for 5 or 10 minutes. After spinning tangalin mo na eh di malinis
na yung shirt mo diba. Tangalin mo yung laman yung 20 peso bill pag tinangal mo yun
buoy un basa nga lang pero yung bond paper na nilagay mo tignan natin kung mailabas
mo yun. Kung mailabas mo man mashed nayan na hindi mo pwede maibukas. Yan ang
best way para malaman natin na ang pera natin ay fiber not paper. Oh ano tawag dun?
Yung ang tinatawag na money laundering, diba nilabhan mo yung pera?
Oh, malinaw?
Ito very basic ah, puro basic muna tayo ngayon. Our notes can be damaged. Pwede yan
masunog, pwede mapunit. Ngayon ito, pag nasunog o kaya napunit, the question is,
whatever may its state (be), may be it accepted for deposit or replaced for a good one?
Tatanggapin pa kaya ng bangko for deposit?
Sabi ng Central Bank, certain conditions must be met.
First, at least 3/5 of the note must still be present. Kaya kung meron kang mawawalang
bahagi dapat di sya lumampas ng 2/5. Para ang natitira at least 3/5 pa.
Another requirement, there must still be at least 1 set of serial numbers.
Another, there must still be one signature.
And one more, no sign of intentional defacement.
Oh maliwanag?
Kaya pa gang hawak mo nasunog na 1000 peso bill, pag may nasunog na bahagi dyan,
hindi lalampas ng 2/5, kasi dapat ang natirang hawak mo at least 3/5.
Now I want to call your attention as to the sets of serial numbers (in a money bill), ang
andun at least dalawa, yung isa nasa lower left, yung isa nasa upper right. Dapat isa
man lang sa dalawang yun, andun pa.
And, sino ba nakapirma? BSP Governor and Philippine president. Ganun dapat ang sagot.
The signatures on a Philippine note are those of the BSP Governor and of the Philippine
president. It’s wrong to say governor and president – kasi ang daming governors, may
provincial governors, may governor ng lions, may governor pa ng rotary. At mas
maraming president – diba, may Philippine president, may senate president, may
president ng mga private corporations, meron pang president ng homeowners
association, at ang pinakamaraming president, president ng TODA. O kaya specific,
Philippine president.
O, isa pa. There must be no sign of intentional defacement. For your info, it is illegal for
any person to intentionally damage our notes and coins. A violation of this is a crime for
which the violator goes to jail. Kasi baka magyayabang ka, meron kang dalang lighter,
kuha ka ng 1000 bill, sinindihan mo. Pag may nakahuli sayo, kaso ka, kulong. In fact,
there were cases in the past, mga foreigners, tourists. And they were about to depart
from the Philippines – andun sa pre-departure area.
I think the last one was a German tourist, nung paalis na, he still has Philippine notes,
baka meron pa syang 20 pesos, 50 pesos, eh he had no intention of returning. Kasi
turista lang naman yan. Kaya ang ginawa nya pinunit nya – not knowing yun palang
airport ang daming CCTV, and every move is being monitored sa airport. Syempre for
security purposes. Nakita sya. And he was not on board an aircraft. And he was given a
taste of Philippine hospitality, inside a Philippine jail. Hindi sya kinasuhan – kasi pag
kinasuhan sya mas matagal, and more costly to the Philippines. They just taught him a
lesson, irespeto mo naman ang Philippine peso. Kaya pinatikman lang sya ng ilang gabi
sa kulungan.
Alam niyo yang mga teller sa bangko, pag walang nagdedeposit o nagwwithdraw, walang
ginawa yan kundi bilang ng bilang ng pera. Yang drawer ng counter nila, may mga
compartments – 20 pesos, 50 pesos, etc. So lahat ng 20 andyan, lahat ng 1000 yan. So
kada pagkatapos ng transaction, ilan ang 20 pesos, bilang. Pagkatapos magbilang, kuha
ng rubber band, tatalian, and the practice BEFORE when it was not yet a crime, dun sa
pinaka top note, ilalagay nya mismo sa note, kung ang bilang ng note 78, isusulat nya
nakaballpen pa.
Tapos later magkakaron sya ng withdrawal, kukuha sya ng 5. dun sa next note yung top
note, isusulat nya 73. That’s why before yung mga notes natin, dami sulat. Kaya nung
ginawang illegal, ang ginawa na ng mga teller, ganun parin, nakabilang parin,
nakarubber band. They no longer write on the top note. Ang ginagawa, kumukuha ng
papel, ilalagay sa top note, and they write on the piece of paper. Kasi pag nahuli sila ng
management na nagsusulat sa note, that is a ground for dismissal. Commission of a
crime. Kaya ganun ang mga tellers ngayon. Malinaw, okay? Alright. So bawal magsulat
sa note. It’s a crime.
Ngayon, ano naman ang requirements TO AVOID ACCEPTING? Kasi ang tatanggap ka
ng si Quezon nilagyan ng sungay, meron pang pangil, parang vampire, hindi tatanggapin
yun. Kasi kung meron mang gustong abalahin ka, sabihin, you committed a violation of
the Central Bank Act. Eh kung pulis pa yun, eh dun ka magpaliwanag sa presinto. Ehdi
naabala ka pa. Kaya hanggat maari, avoid accepting notes which were intentionally
defaced. Pag nakita mo sa pera, wanted textmate, di ko tinantaggap yun.
Requirements of acceptability of damaged coin for replacement or deposit. (1.) no sign

of filing; (2.) no sign of clipping; (3.) no sign of perforation. Ideally the value of the coin
as stated therein should also the cost of its production, but it is not followed by BSP. It
is more than that,therefore, if there are signs of filing, clipping and perforation it
diminishes the value and material content of the coin, so it would not be accepted for
deposit or replacement. Example- kinikiskis nag coin sa karacruz. - liable for BSP law
and illegal gambling. When was BSP created? 1993. Check niyo yung date sa likod ng
coin.
WHEN IS REPLACEMENT OF DAMAGED NOTES POSSIBLE:
1) At least three-fifths (3/5) of the note must still be there;

2) One complete set of serial numbers;
B A N K I N G – A B E L L A N O T E S 4 F 2 0 1 7 - 2 0 1 8 | 10
3) One signature; and

4) No sign of intentional defacement.
For coins: No sign of filing, clipping, or perforation.
When the coins and notes are already damaged, they are turned over to the BSP, then
we say that these notes and coins have been demonitized. So ‘pag sinabing demonitized,
it loses the character of money. Best example, yung old series, when it was finally put to
an end. Actually, dati Dec. 31, 2016. Kaya lang na extend ng 6 months and another 6
months. Kaya lang ang final is last Dec. 31, 2017. So while they may still be money,
they are no longer currency. Remember, money is any medium of exchange. Kahit yung
mga series ng bagong lipunan pa, o panahon pa ni Diosdado Macapagal, they are still
money, but they are no longer currency because they are already withdrawn from
circulation. Maliwanag?
Now one of the other functions of the BSP is the management of money supply. So
what is your understanding of money supply? Alright, pansinin ninyo ah, hindi
currency supply but money supply. So question is, ano ba yung money supply? When
you say money supply, you don’t only refer to currency but they also include
moneys of other countries. So kasama diyan ang mga US Dollars, Japanese Yen,
and other moneys from other countries that are within the Philippines. The law
says money supply, so it’s not only currency but all currencies of other
countries.
Why is there a need to manage money supply? Reason is if there would be too much
money in circulation, kunyari ang dami-dami nating pera, so tendency of the people
would be to consume more. Maganda iyon. But the problem is when we consume more,
the manufacturer will have to produce more. But how much can the manufacture
produce? So if the demand is very high, and the supply cannot cope with the demand,
tendency of prices will be to go up. This is what we call the law of supply and demand.
And the law of supply and demand is not a republic act. It is an economic law.
[JOKE] Sabi ng cabinet, Mr. President, hindi puwede yan dahil that will not be in
accordance with the law on supply and demand. Then sabi naman ng presidente, “Then
repeal the law.” (laughter) Hindi pwede i-repeal iyon. Economic law iyon. Hindi iyan
republic act. Okay?
Actually, maganda ‘pag nag increase consumption, kasi when there is increase of
consumption, that will mean increase of production. And when production has to be
increased, you have to hire more employees, but the problem is, every manufacturer
has only a limited capacity. And if the production can no longer cope with the demand,
then the prices will go up. When prices go up beyond a certain point, then the tendency
of the consumer will be to buy less. Eh kasi ang mahal. Di na ako araw araw
makakakain. So if I consume less, then the manufacturer will be producing less. And
when the manufacturer produces less, ano nangyayari? Bawas ng employees. Cut down
on production. And when you cut down on production, then there will be less
consumption. Kaya kinakailangan binabalanse lang iyan. So the question is, what is one
way the BSP manages supply?
One way is through the so-called reserve requirements. Eh ang tanong, ano yung
reserve requirements? THIS WAS ASKED IN THE BAR EXAM. The reserve
requirements are a percentage of deposit liabilities of banks, which banks have
to deposit with the BSP or invest in government securities. Once more, reserve
requirements are a percentage of deposit liabilities of banks, which banks have to
deposit with the BSP or invest in government securities. Kaya ang tanong, ano naman
ang deposit liabilities of banks? Lahat ng deposito na tinatanggap ng mga bangko sa
atin, they are recorded by the banks as deposit liabilities. Reason: ano ba ang
relationship ng depositor at bank under the Civil Code? Debtor-Creditor. Sino debtor?
Bangko. Ang creditor? Yung may deposit. Kaya yung ating mga dinedeposit sa bangko,
pag nirecord iyon ng mga bangko, deposit liabilities.
Ganito, mayroong accounting. Accounting is simply recording. Ngayon sa accounting

mayroon tinatawag na Asset Accounts, at mayroong Liability Accounts. Kung
dadagdagan mo yung Asset Accounts, you debit. Halimbawa, nagdeposit ka na P1000.
Tinanggap ng banko yung P1000 mo. So nadagdagan yung cash ng banko. Kaya sa pag
re-record ng banko, “Debit Cash.” Kaya lang sa accounting, pag mayroong debit, may
credit, para balansiyado. Kaya ang tanong ano ang ice-credit? Payables. Kasi yung
dineposit mo, lumalabas as far as the bank is concerned, ibabalik sa iyo yun, kasi utang
ng bangko sa iyo iyon. Kaya lang banks don’t call it payables, although they are in the
nature of payables. Kaya lang kung i-record ng bangko iyan: “Deposit Liabilities”. They
call it deposit liabilities. Kasi kung titingnan mo maraming payables ang mga merchants
pati mga bangko. May tax payable. May Payable sa SM. May Payable sa PAG-IBIG fund.
Payable sa Phil Health. Dami niyan. Alright. Tapos meron pa doong money payables. May
money payables sa Central Bank kapag yung bangko, umutang sa Central Bank. So
payable rin iyon. Ngayon, lahat ng deposits ng bangko, tatlong klase iyan ah.
Types of Deposit
1. Time Deposit
2. Savings deposit
3. Checking account
Lahat iyan, recorded as deposit liabilities. And as I said earlier, kapag sinabing reserve
requirements, these are actually a percentage of the deposit liabilities of banks. Ano ba
ang percentage? Depende. Depende kung anong klaseng deposit. Ganito, ah.
There are different reserve requirements in time deposit, savings deposit and
checking account.
If you deposit 1 MILLION on time deposit, the bank cannot lend the whole one million. If
the reserve requirement is 20% the bank can only lend P 800, 000.00. The 20% must
either be deposited with the BSP or invest in government securities
Reserve Requirement: It’s a percentage of deposit liability of banks which banks either
have to deposit with the BSP or invest in government securities.
Lowest rate in reserve requirement is time deposit, highest checking account. Mid way,
savings deposit.
Reason: If a person deposits with time deposits most likely he won’t make any
withdrawals within the agreed period. However if a person deposits with checking
account, most likely he withdraw to pay his creditors.
What are the 3 purposes of reserve Requirements?

1. To service withdrawals
2. Manage money Supply (by lowering or increasing reserve requirement)
3. It’s a source of funds for the re-discounting facility of the BSP
*BSP is bank of banks; banks can borrow money from the BSP in the event
that banks ran out of cash.
O ngayon, pag ang tao gusto mangutang, pupunta yan sa bangko. Kaya lang, the time
may come na yung banko lahat ng paid-up capital and a big part of the deposits were
already loaned out. Kaya ito, marami pang pending loan applications, approved na at
hindi na ma-irelease kasi walang cash ang bangko. Hindi naman pwedeng sabihin ng
mga bangko doon sa … kasi yung mga nangangapply, laging nangungumusta yan. “O,
kumusta yung loan application ko?” “Na-approve na.” “Kailan po release?” Hindi
pwedeng sabihin ng bangko, “wala pa kaming pera. Antay-antay lang kayo.” Hindi
pwede, matatakot yung depositors ‘pag sinabing walang pera. ‘Pag nalaman ng
depositors yan, ma-mimisinterpret na yan. Massive withdrawal yan, bankrupt.
Magsasara ang bangko. Kaya ang ginagawa ng mga bangko, hindi ganyan. Ex. “Ang
dami nating pending loan applications, kulang na ang pera natin.” Ang ginagawa ng mga
bangko, tatakbo iyan sa Central Bank at sasabihing, “pwede bang maka-utang? Ang
collateral namin ay yung receivables namin from our borrowers.” Yung Central Bank
naman will accept these receivables as collateral. At ito yung tinatawag natin na re-
discounting.
Ang tanong: saan kukunin ng central bank yung pera para ipautang sa banko? Yung mga
reserve requirements mismo. Eh kasi, percentage of deposit liabilities required by BSP to
be deposited with it. Pag dineposit as reserve requirement, walang interest yan. Di
kumikita yan. In short: yung part na yun, as far as the bank is concerned, ay tulog. Di
kumikita. O, eh di nakaipon na iyon diyan. O ngayon, here is one bank. Magpapa-
rediscount. If BSP would like to encourage borrowing, ang gagawin ng BSP doon sa
bangkong magpapa-rediscount, sasabihin, “O sige. May interest na yun. 2% per annum
lang.” So, in short, yung bangkong uutang at 2% per annum, mababa ang rate, because
the purpose is to encourage borrowing. ‘Pag nagpautang naman ang bangko sa mga
borrowers: “O sige, 5%.” Kaya yung mga gustong umutang: “Aba, ang baba ng interest
rate! Uutang ako!” Ngayon, ‘pag umutang yung tao, mamimili iyan. Wala namang taong
uutang na sasabihin niya, “Pautang. Wala lang. Pautang lang.” There’s no such thing.
Kung merong uutang, kailangan, it’s for something productive.
‘Pag umutang for something productive, there will be a lot of benefits. Example ng
benefit, may umutang. “Bakit umutang yan? Dati hindi naman marunong umutang iyan.”
“Kasi ang baba daw ng interest rate, kaya yung bahay niya ipapa-renovate niya.” ‘Pag
pina-renovate yung bahay, bibili ng construction materials. Yung construction supply
store, magbabayad ng VAT, so benefit to the economy. Tapos kapag magpapa-renovate,
kukuha siya ng mga masons, carpenters, technicians and other workers. Iyang mga yan,
earlier walang kita. Nung wala silang trabaho, consumption is cut down. Eh ngayon,
dahil may trabaho na, may money to spend. And everytime that they spend, there is
benefit to the economy. Why? Kasi kung bibili yan ng value meal, may VAT. Kaya the
government wants to encourage spending. Kaya ang ginagawa ng BSP, binababaan yung
interest in its rediscounting facility so that the banks can get more people with this
interest and people will be encouraged to borrow if the interest will be lower.
Ngayon, kung ayaw naman i-encourage ang lending, ang ginagawa naman ng BSP,
tinataasan ang interest rate. Halimbawa, nag-increase sila ng 5% per annum, kung ang
bangko ang magpapautang, dapat, magpautang nang 10% per annum. Kasi para yung
5% pambayad sa BSP, yung 5% lalabas, iyan ang income ng bangko. Kaya kung ikaw
yung borrower: “Ang taas! 15% per annum gusto ng bangko o mahigit pa! Ayoko na.
Hintay na lang muna ako.” In short, doing that doesn’t benefit the economy kasi ‘pag
hindi ka umutang, you don’t consume. If you don’t consume, no benefit to the economy.
Kuha niyo? So iyon ang management of money supply.
Kaya nga also, one way of managing money supply is, nabanggit ko na, yung reserve
requirement. Kapag governement would like to encourage spending, bababaan ang
interest rate. So lalaki ang money supply. Kaya if government does not want to
encourage spending, taasan ang interest rate on rediscounting. So konti ang lalabas kasi
konti ang uutang. Kaya iyang BSP, mag-meeting iyang Monetary Board every other
week. Kasi tinututukan nila yung presyo. Kapag Makita nilang masyadong malaki ang
itinaas, let’s say kung anuman yung target ng government nasa inflation rate, tapos
whoops, ang taas! = intervention. And one way is, iyon nga, reserve requirements. Kasi
sa reserve requirements, nandiyan yung wi-withdraw-hin mo, or you’ll have more money
for lending. Okay? Kuha na? Alright.
Another function of the BSP is supervision over the banking system. Actually,
ginawa lang yan supervision. But in reality, it’s control. Why do I say control? Kasi the
law authorizes BSP to issue rules and regulations. Kaya yung negosyo ng bangko, de
numero iyan. Lahat ng ginagawa ng mga bangko, kailangan, according to the manual of
regulations. If you don’t comply, you will be penalized. Kaya lahat ng galaw ng bangko,
dapat sundin yung Monetary Board. I always say this: if you have the power to issue
rules and regulations, you have the power of control. Kasi sinasabihan mo, o dapat
ganito ang gagawin. Kaya yung bangko, dapat sumunod. ‘Pag hindi sumunod, may
penalty. Baka maisara pa. So if you were a husband, sabi ng wife mo sa iyo,
“Sweetheart, gusto ko sana by 7 sa gabi nasa bahay ka na.” She’s only concerned for
your safety. Kaya gabi-gabi naman, you try to be home by 7pm. Kaya lang, one day,
sabi ng friend mo: “Pre, tagal na natin di lumalabas. One for the road tayo!” In short,
instant reaction nung husband, “Di pwede, nag-aantay si misis sa bahay.”
If you do not follow the rules of central bank, there is penalty.
In connection with exercise of the functions of BSP over the banking system. There is a
doctrine “close now investigate later”. This doctrine exists when the BSP receives
numerous complaints in some banking practices of some banks, the BSP will order the
immediate suspension of that bank and thereafter investigate the complaints. It does not
violate due process clause of the Constitution although no hearing is afforded because it
is a valid exercise of police power because public interest is involved. If the bank will be
investigated first, there is a possibility that the bank may already be in bankrupt because
of such continued practices.
Another function of the BSP is the buying of precious metals. The gold productions of all
the mining companies have to be sold to the BSP. The BSP in turn sells it to the USA and
other countries. The reason why the US buys it is because the US dollars is backed up by
reserve of gold. In case of Philippine peso, there is no such thing because it is
guaranteed by the Govt. of the Philippines.
Another function of the BSP is it represents the Phil. Govt. in international monetary
dealings. It has international dealings with World Bank and International Monetary fund.
BANK SECRECY LAW
Purpose:
1. Encourage people with money to deposit their money with banks to promote
national economy.
Money kept in home is not productive. Example, you win 1m in a lotto, you will
en cash the check to the bank and bring it to your house and put it there for a
year, lugi ka because of inflation. The ability to buy of your 1m last year certainly
cannot have the same ability now. So how do you beat inflation? One way is, if
you have money and for example inflation rate is 5%, your 1m must earn at least
5%. Much better if you earn 8% because you still have net earnings of 3%.
Another simple way is before you earn your already spending it( it’s a joke I
guess). Use credit card but make sure you pay before due date because it has
high interest. When you deposit your money with the banks there are numerous
benefit. Look for a bank with higher interest. Don’t make a deposit in a universal
bank because it pays low interest. You deposit with thrift banks or those small
banks that offers higher interest. E.g. bank of Makati which is a thrift bank. You
can negotiate for a higher interest if you place a large amount in time deposit.
2. To provide benefit to government because of the tax it can collect from the
interest in bank deposits. The bank will also lend the money you deposit with
them and interest they will earn is also subject to gross receipt tax. Another is for
example you will build a house and you will secure a loan from the bank. Yu will
purchase materials which includes vat. You will also employ workers and as a
consequence pay them salary. The salary will be used to buy goods which
includes vatable transaction.
Ayan, BIR ko-kolekta.
So the law encourages people to deposit their money in banks. Kasi dati ganito: kaunti
lang ang bangko. Ngayon sa bawat isang kanto, meron. Dati I remember, yung nanay ko
para makapag-deposito sa bangko, sasakay pa ng bus, ng jeep, para lang mag-deposit.
Ngayon, pagtawid mo ng kalye tabi-tabi mga bangko.
Nowadays, there are lots of people who may want to avail of banking services. Kaya lang
dati, takot ang tao magdespoito sa bangko. Bakit? Kasi wala pang SECRECY LAW. Hindi
naman nandiyan lagi yang secrecy law. The SECRECY LAW came out much-much later.
Ngayon, as narrated by my father: Yung sarili daw niyang father, hindi raw nagba-
bangko. Kaya yung mga earnings, yung mga savings nasa caha de yero lang daw! In
short: That’s IDLE MONEY - No benefit to anybody. Kasi noong panahong iyon, wala pa
ngang secrecy law, and people were afraid of putting money with banks.
Why? Kasi nga naman kung walang secrecy law, IKAW: papasok ka sa bangko. Yung
idedeposito mo nakalagay sa brown paper bag. Pag labas mo sa bangko wala ka nang
brown paper bag kasi dineposito mo na. And let us say, somebody had noticed that you
have been doing that frequently.
Yung nakapansin sa iyo, pumasok sa bangok at tinanong yung bank teller:
“Ma’am , yung kalalabas lang. Napansin mo madalas nagde-deposito dito”.
E kasi nga walang secrecy law, sasabihin nung bank teller naman: “Ay, ‘yan ang aming
biggest depositor”
“Magkano na deposit niya?”, follow up question ‘yan nung nagtanong.
E since wala ngang secrecy law, sabi nung teller: “Sandali lang. Ay meron siyang 50
MILLION PESOS sa amin”.
‘Yun palang nagtatanong: KIDNAPPER! Yung depositor: nakidnap. Ransom demanded:

50 million pesos.
Sasabihin nung nakidnap: “Wala akong perang ganoong kalaki”
Sasabihin naman nung kidnapper: “Bago kita kinidnap, tinanong ko na ang balance mo.
Sabi nung teller, meron ka raw 50 million. Kaya bayaran mo na, papakawalan kita!”
E walang secrecy law.
O what could be worse, eto na: umaangos yung kumadre mo: “Mars! ang laki ng
problema ko. Alam mo yung INAANAK mo, hindi ko pa na-e-enroll kasi yung remittance
ng kumpadre mo sa Qatar, hindi pa dumadating. Last day na bukas ng enrollment ng
inaanak mo! Papayag ka ba namang hindi ko ma-enroll iyong inaanak mo?”
Ikaw namang si Kumandre, sabi mo – at laging defense yan - ‘diba? : “Naku Mars,
pasensiya ka na. Ako mismo walang-wala”
E UNKNOWN TO YOU: bago pala nagtanong kumadre mo, nagtanong na sa bangko

kung magkano ang balance mo.
“Mars ikaw naman. Alam mo, bago ako nagpunta dito, nagtanong na ako sa bangko. Ang
balance mo nga raw doon 10 MILLION pesos. Yung inuutang ko lang naman sayo:
P100,000 pesos. 1% lang naman yun! Pagdadamot mo pa sa inaanak mo”.
In short, pinautang mo kumadre mo. “Sige Mars, ibabalik mo agad ito ha. Alam mo
naman yang si Kumpadre mo, baka magtanong pa. E kung hindi niya mahanap, baka
sabihin niya: nanlalalake nanaman ako”.
So in short: You lent your money to your kumadre. Ngayon itong si kumadre mo naman,
na-enroll na inaanak mo. E ngayon, yung mentality nitong kumadre mo pala e ganito:
“Di na mapapansin ni kumadre ito. 1% lang naman ito. So wala nang plano magbayad.
No communication!
Tapos mag-iisang tao na hindi ka pa rin binabayaran. Kaya diniall mo na yung numero.
Sabi mo: “Mars! Malapit na maghappy birthday utang mo sa akin”
“Dadalhin ko bukas”, Sagot sayo

Kaya lang kinabukasan, di rin dumating sayo. Follow up again, follow up tomorrow,follow
up again, hanggang sa hindi na sinasagot yung phone at may caller ID. So ngayon,
dahil pinautang mo at di mo naman napapirma ng promissory note, paano ka
makakasingil?
In short: You lost your money, and you lost a friend.
Umuutang sayo hindi nagbabayad: hindi iyon friend. Diba? Kaya nga sabi ng mga
Amerikano: “Don’t lend money to your friends. You lose your money, and you lose your
friend”.
O what could be worse. Sa akin ito ang pinaka-masama kung walang secrecy law:
O ganito: I am a husband. I am providing for OLD AGE. Ayoko maging dependent sa

mga anak ko. Kaya siyempre paghahandaan ko na yung katandaan mo. So in short: I
regularly make deposits with the bank, and I was able to build up a small fund.
Kaya lang, unfortunately one day, while I was leaving the bank, nakita ako ng asawa ko.
After I had gained some distance – nang malayo-layo na. Yung wife ko mismo pumasok
sa bangko and introduced herself as my wife. E dahil malaki-laki na deposito ko sa
bangko, nung magpakilala yung wife ko na asawa ko siya, yung branch manager sabi:
“Naku ma’am! Kayo pala ang asawa ni sir!” E siyempre ako ang may deposito sa bank,
baka ma-entice yung asawa ko na mag-deposito rin, kaya sabi pa niya: “Ma’am ang
ganda niyo pala!”
In short: he appeased the wife: “Ano pong maitutulong ko sa inyo?”
“Gusto ko lang po malaman yung deposito ng asawa ko dito”
E walang secrecy law.
“O sige ma’am, sandal lang. Bigyan ko kayo ng print-out.”
In short, si husband, pag-uwi ng gabing iyon. For the first time since he got married, he
was met by the wife at the front door of their house . Dati ang sumasalubong dun sa
husbang: yung aso lan na tuwang -tuwa, gumagalaw pa yung buntot. This time hindi
yung aso: it’s the wife. And the wife – Aba! Gulat si husband: niyakap siya hinalik-
halikan pa. Akala nung husband nagkamali siya ng bahay na napuntahan.
And then the wife says: “Alam mo sweetheart, napadaan ako sa bangko kanina”
[JOKE ABOUT DEPOSIT] Alam mo sweetheart napadaan ako sa banko kanina. Nalaman
ko ang laki na pala ng deposit natin sa banko. Si husband, nagpaliwanag, “nagbuild up
ako ng fund para sa atin.” Sabi ng wife, “puwede ba ako na magtatago ng time deposit
certificates at saka passbook” if you were the husband, ano gagawin mo? “Oh sige.” -
oh ano masama doon, you lost your money, but you still have your wife.
Kaya dapat may secrecy. Anong provision ng secrecy law? It is illegal, in fact it is a
crime, for a bank officer or employee to disclose any information relating to any
deposit in a savings, current, or time account, including investments in
government securities. Once more, under the secrecy law, it is illegal for any bank
officer or employee, kahit empleyado ka lang hindi kinakailangan na officer, dapat
absolute secrecy of information on your depositor’s account. So it is illegal for any bank
officer or employee to disclose any information relating to a deposit in the savings
current account, current or time account, including investments in government
securities. Tinanong to sa bar three years ago, kaya lang ang tanong para hindi obvious,
ang tinanong, ang inquiry kung magkano ang kanyang investment sa government
securities. Kaya kung hindi na emphasize sa lecture sasabihin, “ah hindi yan covered ng
secrecy law.” So hindi lang deposits, puwedeng pati investments in government
securities. Bakit kasama government securities? Kasi if you want to invest in government
securities, you deal with the bank. Kung gusto mo bumili ng treasury bill, makakabili
kaba sa kanto? Hindi. Dapat sa banko. Kaya yung banko pag nag invest ng government
securities, dapat confidential information. All information relating to that investment.
Maliwanag? The violation of the law is a crime, punishable by imprisonment of not more
than 5 years, or a fine of not more than 20,000 pesos or both at the discretion of the
court.
So yun ang rule. Ano naman exceptions? There are four (4) exceptions mentioned in the
law itself:
1. Where there is a written authority from the depositor himself. Kinakailangan specific
authority ha. Kasi a person, may have a number of accounts with the bank. Kaya kung
bibigyan ng written authority, dapat sabihin kung anong account ang puwedeng
magbigay ng information.
2. In case of impeachment. So based on your recollection, how many impeachment

trials have we experienced so far? President Estrada at ka’y CJ Corona. Kung napanood
ninyo yung ka’y Estrada, the impeachment trial was by the senate. And in one of the
hearings before the senate, a lady executive from PCI Bank appeared without being
subpoena’d. Si Clarisa Ocampo. She testified on the Jose Velarde account. Yung tinanong
sa kanya, Sino si Jose Velarde? Tinuro niya si President Estrada. In short, dinisclose niya
yung account ni President Estrada. Ang tanong, nakasuhan ba siya? No, because when
she disclosed the information, it was in an impeachment case. Kaya pasok yun sa
exception. What if same person inulit niya testimony niya sa Sandiganbayan. Sa
Sandiganbayan naman, she did not go there on her own. She had to go there because
there was a subpoena. In connection with the plunder case against President Estrada.
And she repeated her testimony sa impeachment court. Ang tanong, was she charged for
having testified in the Sandiganbayan. No. Because third exception…
3. Where there is an order from the court. In case of bribery, dereliction of duties of
public officials, or violation of Anti-Graft and Corrupt Practices Act. Again, when there is
an order from the court in case of bribery, dereliction of duties of public officials, or
violation of Anti-Graft and Corrupt Practices Act. Malinaw? And the last exception in the
law itself…
4. Where the deposit is the subject matter of litigation. Now you have to read the
exception literally. Ang pinagtatalunan sa kaso yung mismong deposit mo. Now, we have
a family corporation, so family corporation, husband was the president, wife was the
cashier. Unknown to the husband, si wife pala naglalabas ng pera sa companya. Sa galit
ni husband upon discovery, he caused the wife to be charged criminally. Napakarami ng
natangay na pera ni wife. E kung kasuhan mo wife mo, e baka nasimot mo na yung
pera ng kumpanya. Eh alright, during the presentation of prosecutor’s evidence, the
private prosecutor filed a motion for the court to order the bank, where the wife
maintain her deposits, to bring the records of her deposits. Siyempre, nag-invoke naman
si defense counsel invoking the secrecy law. To make the long story short, the case
reached the Supreme Court, kaya sabi ng SC: no, this is not covered by the exception.
The exception states the “where the deposit is the subject matter of litigation.” O, e ano
pinagtatalunan sa kaso, “whether or not the wife took out corporate funds?” Hindi
naman pinaguusapan yung kanyang deposits kasi ang suspicion ay yung nawawalang
pera ay nasa bank account niya. Okay, e ang tanong diyan ay “pinagtatalunan ba yung
bank account niya?” Hindi. O hindi nga covered ng exception. E kasi sabi ng law the
exception is where the deposit is the subject matter of the litigation – e criminal case
yun kaya yung deposit sa bank is not the subject matter of the litigation. Maliwanag?
5. There is another exception, it is not part of the law but it is covered by the bar
exams, yung Anti- Money laundering Act (AMLA). So there could be inquiry into bank
accounts upon order from the Court of Appeals (CA).
Alright, sa criminal law ninyo, tinake up niyo bay an? Hindi? O natake up niyo bas a
criminal alw review? Alright, but anyway, sa AMLA, meron tinatawag na “suspected
transcation” Alright, pag sinabing suspected transcation eto yung mga transaction -
pwedeng deposit in banks, pwedeng purchase of *Angelus” (naputol siya). Balikan natin
yung AMLA , meron doon na Anti-Money laundering Council (AMLC) aspect.
Sa AMLC, eto yung commercial law aspect ha, ang tanong, who are its members? (a)
BSP governor, (b) SEC Commissioner and (c) Insurance Commissioner.
O, kapag merong suspected transaction as money laundering transaction, the AMLC can
make the account frozen. So the AMLC applies with the CA for an Order to Freeze that
account. So, ang tanong, gaano katagal ang validity ng Freeze Order na ‘yan? Unless
there is a case be filed in the meantime, the Freeze Order is valid only for six (6)
months. After which, if no case filed, the Freeze Order is automatically lifted. Ngayon yoy
might be asked, which court can order the lifting of the Freeze Order? Since the order is
issued by the CA, only the SC can order its lifting, not another division of the CA only the
SC. Eh kung ikaw may account na na-freeze, do not be bothered to go to the SC. Why?
Gagastos ka lang.Do not expect to obtain a lifting order within 6 months kasi yung
ordinaryong kaso kahit simple issue ay umaabot ng dalawang taon. E kaya after 6
months, walang kaso na-file against you, ipso facto lifted na yung freeze order. E yung
simple issues, the SC takes time to resolve. An example is the Torre de Manila sa Taft.
Ilan taon yun bago maresolve kahit napakasimpleng issue. I think, more than 2 years.
Okay?
Anyway, the AMLA had amended three times already,ang natatandaan kong amendment
was, dati kasi may tinatawag na suspected institutions, so before tinitingnan lamang are
banks, insurance companies at securities dealers kaya nga “instituions.” Ngayon, with
one amendement ginawa na suspected persons kaya kasama na ang individuals. Kaya
ang tanong, who are the individuals covered by the AMLA? Alright, these are (1) dealers
of prescious metals where the value of the transaction is more than One Million Pesos (P
1, 000, 000.00); (2) dealers of precious stones where the value of the transaction is
more than One Million Pesos (P 1, 000, 000.00); (3) for deposits, the threshold amount
of transactions exceeds Five Hundred Thousand Pesos (P 500, 000.00). Kaya nga pa
gang pinaguusapan natin ay diamonds and other precious stones also prescious metals,
ang threshold amount ay hindi lang P 500, 000.00 kung hindi P 1, 000, 000.00 kasi nga
isang bato lang ng magandang diamond could amount to more than P 1, 000, 000.00.
Oh, malinaw? That will be all for Secrecy of Bank Deposits.
FOREIGN INVESTMENTS ACT
The purpose of the Foreign Investments Act is to attract foreign investments for
creation of new industries to generate employment. Okay, ngayon. Ah, eto, history ito.
There was a time that if you were a businessman… Let’s say you owned a factory and
you need raw materials that you can process to goods (can’t understand the last
word???). Dati, you source your foreign currency needs through commercial banks. In
short, alam mo na yung presyo in US dollars nung kailangan mo. In short, the bank will
tell you, “o eto, Peso equivalent.” When you are an exporter, during those days, dadaan
ka sa bank, dadaan ka sa bangko. In short, yung buyer mo pays through the bank and
you also get paid through the bank. Kaya nga lang, you have received in US Dollars,
pero yung equivalent niya in peso. Kaya dati, ang foreign currency, paikot ikot na ‘yan.
Ok, ngayon, there was a time that we ran out of foreign currencies, particularly US
dollars. Kaya nung panahong yun, if you were an importer, sabi ng Central Bank, “if you
want to import, you source your own dollars.” Kasi yung banking system walang dollars.
Alright, so nung panahong yun, merong tinatawag na “black market”. Kapag black
market, well supposedly illegal. Ok, ngayon, yung tinatawag na black market na ‘yun,
yung kung tawagin dati, “Binondo Central Bank”. Kasi yung mga importers, mga Filipino
importers, walang alam kung saan kukuha ng US dollars. Kaya in short, puro sila dun, sa
mga Chinese businessmen sa Binondo. Eh kasi mga traders ‘yan so they have foreign
currency.
Ngayon, the Philippine government needed money to pay for maturing obligations. And
the Philippine government itself did not have the money to pay World Bank,
International Monetary Fund. The Philippine Central Bank had to deal with Binondo
Central Bank. ‘Yang Binondo Central Bank, wala ‘yang structure. Wala ‘yang structure.
Nagkakaalaman lang sila kung sino ang may foreign currency. Kaya walang physical
structure na pwedeng sabihin na, “i-raid natin ‘yan!” In short, grabeh yung sitwasyon
during those days.
Ok. And during those days, banks would not authorize to receive deposits in foreign
currency. Kaya nung panahong ‘yun… Well, dati naman may pumapasok na mga dollars,
kunyari may kamag-anak sa Amerika. Christmas Time. May darating na Christmas card.
Tapos nakaipit sa Christmas card, 10 dollars. Graduation mo, pinadalhan ka ng
Graduation card, may 10 dollars. In short, during those days, yung mga foreign
currencies, were in private hands, nasa bahay lang. At kung marami na ‘yan at may-ari
ng pera may safety deposit box sa bangko, dun nakatago. In short, hindi nakadeposit sa
bangko. So idle money.
So legislature decided to pass the Foreign Currency Deposits Act authorizing our
banks to accept deposits in foreign currency and to entice people to deposit their foreign
currency with the banking system. Ganda ng provision. Not subject to garnishment.
Absolute secrecy. Kasi sa Secrecy Bank Deposits Act, diba merong four exceptions
provided in the law itself? Kaya lang sa Foreign Currency, the only time there could be
disclosure of information is upon written authority of the depositor. Ok. O isa pa, under
the law, not subject to any form of tax. Kaya ‘yan, mga taong may foreign currency, o
eh di deposit. So in short, there is now a source of foreign currency.
Kaya lang, it wasn’t enough. Kaya lang, we needed more foreign currency. So we tried
to imitate China. Alright, if you are familiar with Chinese history, China was a very poor
country and at that time, in the 50’s, Philippines was number 2 economy in Asia, after
Japan. Ok. Kaya lang, Filipinos have not good administrators, so the Philippine became
known as the Sick Man of Asia. There was a time when President Ramos, naging Tiger
Economy. Well, it’s improving so far.
So we tried to imitate China. Yung China was an Agricultural country. Ang mentality ni
Mao, ano lang, na hindi magutom ang mga Chinese. His plan was simply not to allow the
Chinese to starve. Kaya nung panahon ni Mao, it was an agricultural economy. Alright.
Kaya lang nung namatay si Mao, yung pumalit sa kanya was more aggressive. Ayaw niya
agricultural economy lang ang China. So nag-entice sila ng foreign investments. The
Americans, well, they were skeptical. Sabi eh, bigla-bigla ang shift. Communism, tapos
ngayong nag-eentice ng foreign investors. Kaya what I remember was unang nagbukas
sa China was McDonald’s. Kaya naman kung magkalokohan dito, eh konting investment
lang ‘yan. Kaysa nga naman na we pour in a lot of money, eh tapos i-nationalize (ano
raw???) eh di walang mangyari dun sa investment. Alright so in short, it was an
attraction of foreign investments in good faith. Pero nakita ng big manufacturers in
America and in Europe that it’s very good to do business in China. Ayun. Lahat halos ng
manufacturing nandun sa China.
So starting… in the 80’s naubus na ang mga goods na ang tatak ay “Made in USA”. And
it was the start of goods na ang tatak ay “Made in China”. Ok? O ayun ang history nila.
Ngayon, China was very successful. It could be, soon, the biggest economy in the world.
And it was because it was able to entice a lot of foreign investments. Isipin mo lahat ng
mga malalaking factories, andun sa China. Yung mga malalaking kotse? Ah, andun sa
China. Alright, so we tried to imitate it kaya lang ang problema sa atin, masyadong
restrictive. While the intention was to attract foreign investments, kaya lang masyadong
restrictive.
So what are some of the important provisions of the Foreign Investments Act?
1. A foreigner may own 100% of an enterprise… Kapag sinabing enterprise, business

‘yan ha. A foreigner may own 100% of an enterprise to engage in
manufacture of goods but for it to enjoy the incentives under our laws it
must export at least 60% of its production.
Ngayon, eto ah, yung iba ayaw gumastos sa production kasi kapag production capital
intensive ‘yan. Bibili ka ng lupa, tatayo ka ng factory building, bibili ka ng
machineries, bibili ka ng raw materials, you’ll have to hire a lot of employees. So in
short, bago mo mabawi yung puhunan mo, it could take a long time. Alright kaya
ngayon kapag hindi ka pa komportable sabihin mo,pakiramdaman ko muna. So other
investors decided to simply go into buying.
Thus the law provides, a foreigner may own 100% of an enterprise to buy
locally made goods but for it to enjoy incentives under our laws, it should
export at least 60% of local purchases. So yung foreigner, pwedeng mag
manufacture or pwedeng mamili nalang ng locally made goods. Kaya lang para
mapakinabangan yung incentives under our law dapat mag manufacture ka or bumili
ka ng locally, you export 60% of what you produce or what you bought. Oh
ano naintindihan ba? Going slowly so that you can undertand the law. Kaya nga
tinatagalog ko pa, para walang kaduda duda, maintindihan ninyo. Malinaw?
Oh ngayon, another rule under the Foreign Investment Act.
2. A foreigner may engage in any activity for as long as it is not among those in
Negative List A or Negative List B. Negative. Yung opposite ng positive. And you
have letter A and you have letter B. Listahan yan ng mga hindi pwedeng pasukan ng
foreigner. So a foreigner can engage in any activity, for as long as that activity is not
among those come from negative list A or negative list B.
Ano yung Negative List A? Ano yung mga nakalista sa negative list A?
First, a foreigner cannot engage is reserved to Filipinos by the constitution

or a special laws. So, kung tatanungin, ano yung nalalaman niyo with respect to
constitution or special laws? Well shempre unang una, Advertising, oh filipino lang
yan. Also, public service, pang filipino rin yan, that is under the constitution.
Ngayon, the law says reserved by the constitution or by law. Kaya ngayon, ano yung
example ng reserved by law? Well dati, kaya lang hindi na ngayon. Because there is
a later legislation, rural banking was one required to be 100% owned by filipinos.
Hindi na ngayon because foreigners can own up to 60% of a rural bank. Oh
diba? 60%. Samantalang yung iba karamihan, ang foreigner 40% lang. Pero ngayon,
dahil there are more rural banks, foreigners can own up to 60%. Actually, virtual
control na yun, diba? Maaring 60% lang, yun lang ang difference is majority ka na.
Sa public service nga, ang foreigner, hanggang 40% lang. Oh ngayon, sa rural
bank, hanggang 60%. Alangan namang puro foreigner nalang ang rural bank, dapat
may kasama ring filipino. Ano pa? Retail trade. Dati retail trade was only for
filipinos under the Retail Trade Nationalization Law. Ngayon, na-amend ulit yung
Retail Trade Nationalization Law. Allowing foreigners to also engage in retail
business. Kaya lang ang tindi ng requirement. The foreigner, if he wants to
engage in retail trade in the philippines must bring into the philippines, at
least 2 million US dollars. Kaya very intimidating. Kaya until now, foreigners na
pumapasok sa trade, konti lang. And the first foreigner to engage in retail trade ay
yung S&R. Meron na bago, Landers. Yang S&R, matagal na yan, kaya lang ang tagal
bago nasundan kasi ang laki ng requirements eh: 2 Million US dollars. Okay? Uy,
masarap mag shooping doon, maganda selection, mura pa! Lalo na pag nag, ang
tawag nila. Super crazy sale! When I go there frequently, jan lang, sa Landers, kasi
ang lapit lang dito, Otis. Alright, so ‘yun ang negative list A ah.
Ano naman ang negative list B? Yung Negative List B, is a list of specific areas
that foreigners cannot imvest in. Ito, specific activities. So ano yung mga
specific activities na hindi pwedeng pasukan ng foreigners? One is armamments.
Armaments, baril. Ammunitions, Ordnance. Hindi ordinance. Mamaya igoogle
niyo na. And also Explosives, unless with the consent of the secretary of national
defense. So paggawa ng baril, bala, yang tinatawag na ordnance, saka yun nga
explosives, makakapasok lang ang foreigner jan, kapag mayroong consent ng
secretary of national defense. Kasi dapat yan ay pang pilipino. Ang problema, ang
pilipino naman, hindi naman nakakagawa ng ganito ang pilipino, ang pilipino
nakakakopya. Infringement yun. Okay? Di'ba mayroon tayong dun sa ano, doon sa
Cebu, gumagawa ng baril. Sa Lanao. Correct? So andun na nga yung baril, 45.
Correct? Dun sa Lanao, mura lang yun. Kung dito yung 45 eh mga forthy five
thousand ang isa, doon naka open na, ang ganda ng pag open nila, kaya lang, hindi
ka na kakatihan pero puputok. Eh kasi diyan ginagawa ang mga precision ng
instrument para makagawa. Yung pin, ang tataba niyan eh, kung lumihis yan, edi
puputok. Kaya ang ginawa ko, edi pumutok, kakakalumpag ko, ayun tinamaan,
pumutok! Pero alam ko, asawa ko pumatay. Nakakatuwa sana yung mga tinatawag
na paltik. Yung mga tinatawag na paltik. Yan! Nakakatuwa naman niyan, edi, yung
mga gumagawa, they even, kasi nga naman, kinokopya lang yan, pati yung brand na
pangalan, kinokopya. Kaya lang there are times, mali spelling. Nangopya na, di pa
kinopya ng tama! Yung iba Smith and Wesson, makita mo, isa lang ang S.
Alam niyo, kung bibigyan mo lang ng equipment ang pilipino, kayang kayang
mangopya, kasi wala na ngang equipment, nakakakopya pa ng magandang trends,
yun nga lang, hindi lang reliable, ah, kasi pati yang mga gun parts kasi,
kinakailangan precision 'yan. Hindi basta bastang optimum, okay? Alright! So, ano
pang hindi pwede sa ano, sa foreigners: Night clubs, night clubs.. Alam niyo ba
yun, night clubs? Denial. Okay. Night, gabi. Clubs, spelling c-l-u-b-s. Night clubs.
Alright? Dati marami jan. Kaya lang, yang night clubs, mahal jan! Nagtataka kayo
bakit pagkamahal mahal samantalang sa loob, pagaka dilim dilim. Nako, kung bibili
ka naman ng beer, may dala kang flashlight para ipakita sa'yo yung beer. Tipid tipid
na nga sa kuryente, ang mahal mahal pa. Okay? Yun ang night clubs. Alright? Well,
noon, may dancing floor jan, yung dancing floor, ah, pinapatugtog dun yung mga
sweet lang saka very sweet kaya yung mga nagsasayaw, hindi na gumagalaw. Naka
ganun na. Kapag tumigil yung tugtog, nakatigil na. Alright. 'Yan, pang pilipino
nalang. Kaya lang, well, overtime, nakakasawa na yung ganung ang dilim dilim pero
ang mahal mahal. In short, nauso na yung Beer House. Diba? Alright! Ngayon, yung
beer house, kasama sa negative list B. So night clubs, beer houses...
So next comes beer houses. So question. Kasama ba restaurants? Di kasama

restaurants. Ibig sabihin wala sa negative list B. Ibig sabihin pag foreigner pwede
mag restaurant pero di pwede beer house. Ano ba pinagkaiba? Mga ganitong
bagay dapat alam niyo because when you become lawyers the public will think you
know everything so you should really know everything. So ano ba pinagkaiba? Ako as
far as I know pareho sila nag serve ng beer and food. Sa beer house may beer order
ka pulutan may food. Sa restaurant tingin ka sa menu may drinks may beer. Ano
pinagkaiba? Ito naman observation lang. Napansin ko sa restaurant halimbawa
Barrio Fiesta may singing cooks and waiters and they perform cultural dances . Yung
mga beer houses may cultural dances din. Kung ano suot ng mga taga Barrio Fiesta
yun din suot ng taga beer house. Kaya lang napansin ko sa Barrio Fiesta kung ano
suot ng taga Barrio Fiesta kung ano suot nila sa simula nandoon pa.Kaya lang sa
beer house napansin ko habang sumasayaw unti-unting nahuhulog. Isa pa napansin
ko sa beer house tumatumbling pa yun at may split pa. Alam niyo yun diba? Sige one
time let’s go.
Steam baths kasama na sauna. Ano ba ang steam baths? Wag niyo isipin masama
ang steam baths. Ano ba pinagkaiba ng steam baths sa sauna? Steam baths usually
malaking kuwato tapos may bench so yung customer pag bukas ng pinto wala siya
makita kasi may steam na. Kay ayung kuwarto punong puno na ng steam. Pag ikaw
papasok ni tuwalya wala ka dala the reason is mababasa lang lahat kasi yung stream
didikit sa katawan mo mag drip yun. Mainit yan di naman nakakapaso edi mainit
papawisan ka kaya pag nag tuwalya ka yung tuwalya mababasa ng pawis mo and
mababasa ng steam. After your session inside you feel relaxed.
Ano naman pinagkaiba ng sauna? Maliit lang yan kaya usually pang dalawa lang yan.
Pag pasok mo mainit agad yan kasi sa gitna may rocks na may apoy kaya singaw pa
lang mainit na parang oven and gusto mo pag napaka init naman and gusto mo
magkaroon ng konting moisture lalagyan ng tubig patakpatak mo sa bato may steam
yan so in short magkakaroon ng konting moisture. Yan pinagkaiba yan pang Pilipino
lang.
O ano pa pang Pilipino? Massage parlor and as the law provides all other areas where
there may be an increase in risks to public health. Sabi ng mga legislators wag na
tayo kumuha ng foreign investments dito dapat walang competition ang Pilipino kasi
Pilipino lang naman ang ano...kasi Pilipino lang naman ang.. kaya nagkalat massage
parlor. Ang very common offering is foot spa. Kelan kumalat yan? Sino nagpauso
niyan? Si Jesus Christ last supper. Di ba yan umpisa ng foot spa.
Alright so yan pang Pilipino lang kasi yan ang naka lista sa Negative List B.
O ngayon other rules on foreign investments.
3. If you are a foreigner and want to invest in the Philippines you should bring
an inward remittance to the Philippines of at least $200,000.
Kaya yung mag invest na di covered ng negative list A or B dapat magpasok yan ng
at least $200,000. During those days equivalent to about P10 million kasi nung
ginawa yun law the rate of exchange is similar to what we have now nasa range ng
P50. During those days pag may foreign client ang sinasabi namin o do you have
$200,000? Because the law requires at least P10 million.
What if the foreign investor doesn’t have that much money? Di na ba yun
pwede mag invest sa Pilipinas? Kaya naman 2 requirements.
A. A foreigner who may not be able to make an inward remittance of at least

$200,000 should bring in to the Philippines advance technology as determined by
the DOST
B. And must hire on a regular basis no less than 50 Filipino workers
Kaya kung ikaw foreigner wala ka mapapasok na US dollars pwede ka pa kaya lang bring
in advance technology as determined by the DOST and hire as a regular basis at least 50
Filipino workers.
Isa pa. The legislators were aware that there were many Filipinos who immigrated and
adopted a foreign citizenship. Maraming mga Filipino na natural born na nag immigrate
to work. Kaya lang dahil meron limitations ang rights kung ikaw ay foreigner so the
Filipinos decided to adopt foreign citizenship. What’s provided in the Foreign Investments
Act is that yung former natural born Filipino who worked sa America kaya lang napansin
nila na 2nd class citizen lang sila because they don’t enjoy certain privileges Americans
enjoy kaya sabi nila mag American citizenship na kaya tayo and they did.
Naisip natin second-class citizens tayo, kasi we don’t enjoy certain privileges that
Americans enjoy. Kaya sabi natin mag-American citizen na kaya tayo, which we did.
Kaya ngayon, while we may still look Filipinos, kaya lang Amerikano na kami ngayon.
Alright ngayon, under the foreign Investments Act, itong mga former Natural
Born Filipinos, can buy land in the Philippines. Kasi under the PH Consti, Foreigners
can only buy condo units. Lands, may only be bought by Filipinos. Kahit na yung Pilipino
na yan, hindi yan Natural Born. Kasi sampol, sa Pilipinas, andaming bumbay dito,
mukhang bumbay, amoy bumbay. Kaya lang Pilipino naman na, eh. Filipino citizen. Kaya
yung bumbay na yan, may house and lot na yan, di lang condo unit. Ok? Kaya pag
foreigners, makakabili ng condo unit. Kaya para makabili ng lupa, dapat Filipino citizen.
Although under the Consti pag Foreigner pwede rin may acquire kaya lang by intestate
succession. Kaya halimbawa ikaw, anak ka ng Natural Born Filipino although dati
immigrated to the US, and you acquire Filipino citizenship, and ikaw dun ka na rin
pinanganak sa US, so amerikano ka na rin. Kasi sa Amerika, jus soli, place of birth. Hindi
ka pwede bumili lupa sa Pilipinas. Kaya lang kung magkataon naman, yun lolo mo,
father ng tatay mo, namatay, at walang ibang heirs kundi ikaw –you inherit. Because the
law allows it. Kasi foreigners can acquire land in PH, only through intestate succession.
Kaya dahil namatay lolo mo, walang ibang magmamana, kahit na ika’y Amerikana, or
any other nationality, you acquire land in the PH.
O ngayon, balikan natin yung former Natural Born. Kunwari ika’y nag immigrate sa
Amerika, nagkatrabaho ka doon, pamilya. and, in your later years, na-homeshick ka sabi
mo gusto mo uli bumalik sa Pilipinas. Alright, so in short, not knowing the present
condition in the PH, thinking it’s still a very backward country, kaya di mo muna sinama
asawa mo, ikaw muna nagpunta rito. So in short you came over, you were surprised.
Bakit ang tataas na ng buildings dito? Samantalang dati, mataas na yung 2-storeys?
Kami nga dati bungalow lang e, ang dami nang sasakyan dito! Grabe na ang trapik! Dati,
kalesa lang! Totoo, that was in 1950s, e. At kung meron ngang motorized na sasakyan
noon, yung mga jeep na iniwan ng Americans after the war, yung Willy’s jeep. Ang
sakay, anim lang. Ang tawag doon, “AC,” or “auto-calesa.” Kasi ang mode of transport
noon calesa, e motorized. Over the years, andiyan pa ang saraw, using used engines.
Ang mga tapon na engine ng Korea, Japan, ginawa ng Pilipino, pinili, ikinabit sa jeep.
Yung mga jeep na bagong benta, bago ang kaha. Kaya lang ang motor, dapat i-overhaul
na. Kaya lang pinapalabas brand new. Sobrang usok, that’s why government is now
complaining, alis [something], alis usok. Yung mga dating Natural Born Filipinos,
nakakabili nang lupa ngayon, hindi lang condo unit. IN short, when you were told of the
Foreign Investments Act, sabi mo interesado ako, kasi gusto ko na bumalik sa Pilipinas.
Ive missed the Philippines.
So ang tanong, anong klaseng lupa? So ganito ha, you have a choice. Kung ikaw ay
country (mouse)? you can buy rural land. But if you have always been a city mouse, you
can buy urban land. So mamimili ka, di pwede pareho. Sabi mo, kung saan may
internet, ATM, edi dito ka sa urban area. Kaya lang kung dito bibili ka sa urban area,
may limit.
A former Natural Born can buy as big as only 5000sqm. And of course you may
ask, pwede ba sa Manila, ay wala nang lupa dito. Kaya nga in some urban areas, meron
pang mga 5000sqm. Sa Davao, Iloilo, marami pa yan. Wala na nga lang sa Cebu, kasi
ang Cebu, para naring Maynila yan. Or even worse. Traffic. Nako, kung di pa kayo
nakakapuntang Cebu, wag na kayo pumunta. Pareho din sa Maynila. Kung ano meron sa
Cebu, meron rin sa Maynila. Ang wala lang dito sa Maynila, kung sakali konti lang,
Cebuana. Kaya nga kung ano meron establishment dito, meron din doon. Ok?
O ngayon, sabi mo hindi, ako nung bata, kasama ko lolo ko nagtatanim kami bigas
gulay, gusto ko ganun. So pumunta ka sa rural area, if you want to buy may limit
yan – 3 hectares. You have to choose, either rural, or urban, you cant have
both. Rural, 3 hectare-limit; Urban, 5000sqm. Maliwanag?
So in short tuwang tuwa ka, nakabili ka agad, hindi mo na pinakawalan yung

ooportunity, bumalik ka na sa Amerika you told your wife your experience in the PH.
Sabi mo, sweetheart, ibang iba na sa Pilipinas. Grabe na ang traffic doon, heavyweight!
Tapos ang mga kalye, tatlong patong, lalo sa Ortigas area. Ibang iba na. So in short,
sabi mo pa, alam mo nakabili akong lote sa Pilipinas, ito o, titulo. In short, nainggit si
wife. Ako rin, bibili! So si wife, pumunta dito. And she wanted also to buy land. E hindi
pwede. Why? Because what one spouse buys, shall be for the two of them. They
cannot have separate. Sasabihin ni wife, e ayoko ng urban! Gusto ko rural! Hindi
pwede, ang nabili ng isa, para sa inyong dalawa. Eh, talagang desidido ka, you really
wanted to buy. But you cannot anymore acquire, because you have that limitation. E
anon a ngayon ang remedy mo? I-divorce mo yung asawa mo. Pagka-divorce, edi
Former Natural Born, divorcee, single and then you can buy.
O yan ang Foreign Investments Act. Any questions?
Sir, when you buy land can you convert, like from rural to urban?
No. Basta pag namili ka, kapag binili mo, hanggang dun ka lang. In fact, there
is a provision that you cannot have lands in more than 2 cities or municipalities.
Kasi halimbawa, may per aka, ikakalat mo yung investments, mo, bibili ka lupa sa
Maynila, Pasay, Makati, Pasig, Mandaluyong. Sasabihin mo, bibilhin ko lang naman tig
500sqm. Odi 5000 ang limit ko, edi 10 cities yan. Hindi pwede. Kahit na tig 100sqm
yon, hanggang dalawa ka lang. Hindi mo pwede i–spread into different cities and
municipalities. Hanggang dalawa ka lang. Maliwanag? Anymore questions? Sir, are there
any more incentives? Incentives? Alright marami.
What are the incentives that foreigners may enjoy? Accelerated depreciation, kung
halimbawa ang depreciation is 10 years ma-accelerate mo yan 5 years na. At tsaka
merong mga industries na wala kang babayarang income tax for so many years. Kaya
lang for foreigners to enjoy these incentives, they must register sa Board of
Investments. Kaya yung mga incentives, depende yan kung anong industry ang
papasukan mo, mostly mga tax incentives yan. Sa totoo lang, if I were the government
sasabihin ko na sige na, pumasok na kayo dito, wala kayong babayarang income tax.
Kasi ang point ko, pagpasok niyan dito marami yang magiging employees. Yung
employees kikita, magbabayad nang tax yan kung ako yung government
makakakolekta din ako, kesa wala. Kaya lang iba ang thinking nang legislators natin,
masyado tayong restrictive kaya mahina ang kita ng foreign investment. Kaya lang
maraming pumasok dito kasi Pinoy madaling matuto, marunong pa mag-english. That's
why Korea, dito nagpapagawa ng barko. Yan ang mga Pilipino, pag naturuan-
humuhusya, tsaka madaling turuan.
Sir, since the retail trade and the prescription on rural banking is not anymore
restricted by law, are there industries restricted reserved to the Filipinos?
For now, I dont know. Kasi mga Pilipino pa rin talaga, although mayroong isang
exception, yun ang gustong tanggalin ng Legistators para pumasok ang foreign
investors. Kasi if magpapasok pa ng maraming retrail traders eh, ang pinapatay ang
small enterprises, which the goverrnent is protecting. Kaya mapapansin niyo diba MSME-
- Micro-Small-Medium Enterprises, yan yung in-encourage ngayon para sa mga Pilipino.
Ang purpose talaga is generate more employment para mabawasan yung unemployment
rate.
What if the property relation of the spouses who were former Filipino nationals
is complete separation of property?
Kahit na, kasama pa rin sila. The Classification is at the time of acquisition, halimbawa
yung dating munisipality ay naging city na eh di naging urban na rin yun ngayon, yung
classfication is at the time of acquisition.
GENERAL BANKING LAW OF 2000
Firstly, What is a bank? BANK- well lahat ng banko under the present law
are organized as stock corporation, so that makes a bank a stock-corporation. Bank is a
stock corporation that grants loan from deposits. May mga corporations na
nagpapautang rin, kaya lang etong mga corporations na eto yung mga pinapautang nila
is from their capital-contribution or the paid-up capital; and these corporations ay hindi
pwede tumanggap ng deposits because they are not banks. Ngayon pag-banko, ang
sources ng funds siyempre yung paid-up capitals tapos yung mga public deposits. Kaya
anong ibig sabihin ng PUBLIC-- Means more than 19 persons. Banko, it is stock-
corporation that grants loans from its deposits and only banks can accept deposits from
public.
How are banks classified? Based/ according on the amount of capitalization.

Kaya ang pinakamalaki is universal bank--- paid up capital will be not less than 5 billion
pesos. Going smaller, commercial banks. Smaller further, thrift banks. Thrift banks
have 3 classifications: savings and mortgage bank; private development banks, and
stock-savings and loan association. Fourth is cooperative banks. Fifth, rural banks.
Then, Islamic banks.
1. Universal Bank
2. Commercial Bank
3. Thrift Bank
1. Savings and mortgage bank
2. private development bank
3. Stock-savings and loan association
4. Cooperative Banks
5. Rural Banks
6. Islamic Bank
COMMERCIAL BANK, stated in the definition of universal bank—that it is a

commercial bank that may engage in the business of investment house thats why it is
important to know first the functions of commercial bank. There is no definition of
commercial bank, but there are list or enumeration of inherent functions. One of
them is Acceptance of deposit in checking accounts. Kaya kung gusto mo
magkaroon ng checking account, pumunta ka sa commercial bank. Checking account is
also known as current account, they are also known as demand deposit.
Another function that’s inherent to a commercial bank is yung opening ng

letters of credit. Opening of letters of credit. Okay ngayon you might say, sir bakit
yung kuya ko merong current account sa Philippine Savings Bank. Bakit yung tatay ng
kaibigan ko nakapag open siya ng letters of credit sa Sterling Banking of Asia or kung
hindi man, doon sa Philippine Business Bank. Bakit sila nakapagopen ng letters of credit
doon? At bakit doon sa Philippine Savings Bank bakit meron silang checking account?
Kung meron man yung ibang bangko, nakapag open ng letters of credit o kaya naka pag
open ng checking account o savings account, yun ay by special authority of the Monetary
Board. Hindi yun inherent function. Pero basta commercial bank, inherent na yan.
Basta commercial bank ka, yan mga basic functions. So keep that in mind. The smaller
banks they may be also authorized by the Monetary Board to accept deposits in checking
accounts or even open letters of credit. Malay mo rural bank, pwede din. I think merong
isang rural bank na malaki sa Mindanao, One Network Bank. Rural bank lang yon. Kaya
lang I presume pwede kang mag open ng checking account doon. Kaya lang if ever by
special authority from the Monetary Board. Maliwanag?
Okay there are other functions like savings deposits, time deposits, leases of safety
deposit boxes. Alright foreign currency trading pwede yan. Oh ngayon yang commercial
bank, yan ay isang function ng universal bank. Because in the definition of a universal
bank, “A universal bank is a commercial bank but may engage in the business
of an investment house.” Kaya ang tanong ngayon, ano ba ang investment house?
Meron ba kayong alam na investment house? In your study of law, you didn’t come
across an investment house? Dapat meron yan sa Nego. Negotiable Instruments Law.
Oh ano yung topic sa Negotiable Instruments Law, holder in due course. When a check is
crossed, the check is no longer regular upon its face. So if you got that check, you don’t
qualify as a holder in due course. Eh ang tanong saan lumabas yung ruling nay an anong
kaso? Bataan Cigar and Cigarette Factory vs CA and SIHI. Ano yung SIHI na yon? State
Investment House Incorporated. Yun ang investment house. Kaya lang hindi lang yun
ha. May iba pa. The corporate name of which is very suggestive that it is an investment
house. Merong isang kumpanya, part of the Yuchengco Group of Companies. The shares
are even listed in the stock of shares. Nakakatuwa pa nga eh. Ang pangalan House of
Investments Incorporated. Anong negosyo niyan? Edi investment house.
Yung mga investment houses, yan ang tinatawag ding quasi banks. Hindi sila pwedeng
tawaging bangko kasi ang bangko pwedeng tumanggap ng deposits from the public.
Which they cannot do. Kaya lang sila, nagpapa-utang. Kaya ang pagpapa-utang is a
banking function. Kaya lang di pwedeng tumanggap ng deposit, kaya di pwede maging
bangko. Kaya lang, nagpapautang naman kaya ang tawag ay quasi banks.
Ngayon, ano ba ang mga main businesses ng investment houses? Alright ang una,
rediscounting of receivables. Oh natandaan niyo sinabi ko sa inyo about rediscounting?
Diba sabi ko dati na ang bangko pag mangagailangan ng pera para ipautang, ang
bangko tatakbo sa Central Bank. Sasabihin sa Central Bank, pautang nga. Ito collateral,
receivables. We refer to this as rediscounting. Kaya lang ang nakakautang lang sa
Central Bank, ay bangko. Keep in mind there are also other merchants engaged in credit
transactions. Kaya ang mga merchants nay an uupo lang sa tabi yan and they still have
to wait before they can collect. Eh ang tanong, pag di nakakolekta eh sara muna. For
example, appliance stores. Anong appliance stores and alam niyong nagpapautang in
installments. Automatic Centre, Abenson, Ansons, Western Marketing. Meron ding
Robinsons, SM. Yan mga nauna kong binanggit alam niyo yan kasi nasa mall yan mall
operations. Meron yung DRB, kung saan nakatayo yung Savemore ngayon. Del Rosario
Brothers. Ang negosyo, nagpapahulog ng appliances. So in short 60s, 70s, even 80s,
napakaraming nagpapahulog ng home appliances. So kunwari lang you have paid up
capital and you want to engage in installment sales of appliances, ang dami mong
capital. Using your capital, you buy assorted home appliances. Ngayon opening mo na,
may fireworks pa. You have a lot of customers. Nagpasukan lahat. Akalain mo naman
napakabuenas mo before noontime, sold out. Lahat ng laman ng tindahan mo napahulog
mo na napautang mo. Ang tanong wala ka nang stock. Ano gagawin mo ngayon,
magsara muna. Kasi baka may dumating na customer, “meron pa po ba kayo?” “Ay wala
na balik ka next month. Baka next month nakakolekta na ako. Pag nakakolekta na ako,
ibibili kita ng gusto mo.” May negosyo ka pa ba? Wala. Kaya yung nagpapahulog nay un,
diba ang dami niyang promissory notes and receivables. Kaya ang gagawin niya,
ipaparediscount niya. Kaya lang di siya sa Central Bank pupunta. Pupunta siya sa
investment house. One of which sabi ko kanina, State Investment House. Another,
House of Investments. Marami yan di nga lang sikat na sikat kasi they don’t deal with
us. They deal with merchants. Kaya ang nakakakilala sa kanila, merchants. Maliwanag?
So yun ang rediscounting of receivables and it is one of the businesses of an investment
house.
Another business of an investment house is the underwriting of securities. What is your

understanding of underwriting of securities. When you say underwriting of securities, “it
is the committing on a firm basis or best efforts to raise the money needed by a client.”
Oh ganito yan. San Miguel Corporation. Ano ang original na negosyo ng San Miguel?
Brewery, beer making. While it is a very progressive company as a beer maker or
producer, kaya lang it has to diversify. Kasi if it will stick to only one product, ang gross
mo pwedeng malaki pero over time, maliit lang yan. Kaya ang San Miguel later it
diversified. Pumasok na sa food kaya meron tayong Magnolia Chicken, Monterey,
Purefoods.
…tapos meron pang Purefoods. Okay? And those have been the businesses of San Miguel
for a long period – beer, then food. …halimbawa yung sa packaging: merong San Miguel
Packaging Corporation. Kaya naman ginawa yun kasi imbes na bilhin pa yung mga
cartons from other businesses, ang sabi ng San Miguel: “Eh di tayo na lang gumawa,
kesa bibili pa tayo.” Ngayon, that was the businesses of San Miguel when the president
was still Danding Cojuangco. Kaya lang syempre tumanda na si Danding. So they
decided to transfer the management to a younger person: si Ramon S. Ang. Kaya kung
tawagin ng mga negosyante yan, si RSA. Ramon S. Ang.
Ngayon itong si RSA, bata pa kasi yan. Maybe he’s in his sixties, kaya lang very
aggressive. Kaya when he became president of San Miguel Corporation, he thought of
further diversifying. Nakita niya ano yung big potential business: energy. Kasi di ba may
shortage tayo ng kuryente. Sabi nya: “Makapag-diversify nga sa power?” So ang ginawa
nya, yung San Miguel, yung production ng beer, ini-spin-off yan. San Miguel formed
another corporation – and that corporation, yung San Miguel Brewery, Incorporated: Yan
ang gumagawa ng beer ngayon.
Wala namang problema sa Magnolia, Monterey, and Purefoods, kasi mga hiwalay na
corporations na yun talaga. Ngayon, as the thrust was to convert San Miguel to engage
in power business, kaya nung na-spin off na, ang unang ginawa, ang San Miguel made a
tender offer for all Petron shares. Kaya there was a time, nag-offer yan sa dyaryo,
talagang offer to acquire all Petron shares. Kaya lang hindi naman lahat nabenta, kasi
yung mga may isip, … ang presyo, kaya lang, bakit gustong bilhin ng San Miguel ito? Ah
may plano yan. Di ako magbebenta. Sasabayan ko yan plano ninyo. Gagawin kong mas
malaki.
Ngayon, step one yun. And suddenly San Miguel wanted to buy a lot of shares from
Meralco. That’s why there was a time that San Miguel was one of the three or four,
biggest stockholders ng Meralco. I think mga around 25%. Ngayon, power pa rin yun di
ba? Kaya lang, ano na yun? Transmission. San Miguel also produces electricity. Ang San
Miguel meron pa rin yang isang kompanya: San Miguel Power Corporation. Ang negosyo:
power generation. Kaya kung anong pino-produce na power nung kompanya na yun, yun
naman ang tina-transmit ng Meralco.
Then San Miguel realized: “Mas malaki pala kinikita sa power generation.” Kaya ang
ginawa ng San Miguel, yung shares sa Meralco, binenta. Ang presyo, P82 billion. First
thing, tanong, saan kaya kinuha ng San Miguel yung pambili ng Petron shares, worth
billions of pesos? At saan din kinuha ang pambili ng Meralco shares? Tapos nagtayo pa
ng planta. Now you might ask: “Ganun ba karami pera ng San Miguel?” Hindi.
Ang ginawa ng San Miguel ganito: nag-offer ng preferred shares to the public.
Guaranteed, seven and a half percent per annum. Ganito kasi yan, for your info: Dati,
yang mga big businesses, ‘pag nangangailangan ng pera yan, takbuhan nila bangko.
Kaya lang, napakalalaki na ng mga requirements nila ngayon, that not one bank can
lend what they need. Remember, mayroon tayong tinatawag na “single borrower’s limit.”
Kaya gustuhin man ng bangko i-provide lahat ng kailangan nung kliyente, hindi kaya.
Kasi hanggang diyan ka lang pwedeng umutang.
So, in short, because of this restriction, itong mga big corporations, they decided to look
for a source of unlimited funds. Na-diskubre nila kung ano iyan: the public, tayo. Na-
diskubre nila yan. Kasi nangyari dyan, sabihin natin nag-offer na ng preferred shares,
seven and a half percent per annum. Front page yan ilang araw. Ngayon, hindi nagtagal,
fully subscribed. So, ang tanong: “Who did it?” Ganito ah, picture it this way: ako si San
Miguel. I need to raise, oh kunyari lang ah, may plano ang San Miguel. Ang San Miguel,
after power, nag-ano pa yan, nag-infrastructure. PPP [Public-private partnership].
Skyway. Ang plano nya ngayon: nag-submit na ng proposal sa government. Another
airport. Di ba merong PPP – public-private partnership. Ang plano ng San Miguel,
magtayo ng airport sa Bulacan. Project cost: P100 billion. San kukunin yon? Yun nga,
na-diskubre nitong mga big businesses, sa tao pala. Sa atin.
So, you might be wondering, sino? Ganito kasi: Kung papansinin nyo ngayon, ang rate
ng time deposits, napakababa, all time low. My bank, di ba I do business, ang interest
nun time deposits is only .8 percent per annum. Tatanggalan mo pa ng 20% withholding
tax yun. Na yung .8 nung isang milyon nya, that’s about P80,000. Tatanggalan mo ng
20% so ang matitira sa yo is around P64,000. So, nakita yan. Marami palang tao,
maraming pera, hindi lang marunong mag-invest. Kaya napakaraming time deposit
ngayon. Kaya based on my experience, all time low. Kasi in the 60s, when I was working
with a bank, the bank where I was working must pay interest on time deposit at the rate
of eight percent per annum. At ang savings natin six percent per annum. At ako, alam
ko pang compute-in ang interest, manual pa. Di pa uso ang calculator nung panahong
yun. Nung panahong yun adding machine pa, manual pa. Naiikot mo, nakakapag-
multiply, kapag divide naman atras. Kaya all-time low.
Ngayon, nadiskubre yon. Eto ngayon, if San Miguel would offer, kunwari in-approve ni
Presidente yung offer na airport, na worth P100 billion, gagawin ng San Miguel, pupunta
muna sa SEC. Sasabihin sa SEC, “Oh. Magtatayo kami ng airport. Magre-raise kami ng
P100 billion. Mago-offer kami ng bonds. So in short, a corporation very solvent, in a
short period approved. Kaya yung mga bonds, nai-issue. Yung preferred shares, yun ang
tinatawag na mga securities. And as you will learn later, before anybody can offer
securities to the public, dapat rehistrado muna sa SEC.
O ngayon, rehistrado na. Ngayon, kunwari ako San Miguel ah? Will I be the done to deal
directly with the potential investors? Ako ba maghahanap? Ako ba makikipag-usap sa
potential investor? Hindi. Ang gagawin ko, ako ang San Miguel, kokontakin ko yung
universal banks. Kontakin ko yung mga investment houses. Kunwari lahat kayo, ito BDO,
ito PNB, imbitahan ko kayo. Then I make a presentation. Sabihin ko, “You know very
well… a contract constructing new airport in Bulacan. Our project cost is P100 billion.
Can you help us raise that amount?” Okay. Sabi ni BDO, “Sige, sagot ko P10 billion.”
Hindi naman magpapaiwan si BPI. Sabi ni BPI, “Ako P10 billion rin.” Security Bank, “Ako
rin, P10 billion.”
So in short, yung mga gustong mag-participate, may commitment na. Yan ang
tinatawag na mga “underwriters of securities.” They commit on a firm basis to raise the
money given by a client. Kaya ang tanong ngayon, bakit ba sila papasok sa ganyan?
Aba, may komisyon yan. Ilagay mo na lang sa one percent. Ano ba one percent ng P100
billion. Eh di P1 billion. Ang laki yata nun. At walang kahirap-hirap yan sa bangko. Why?
Halimbawa, nag-commit sya. Ako hindi, as an underwriter. BDO, titignan lang nyan ang
listahan ng bigtime deposit. Kunwari sabihin nung presidente: “Oh, Mary. Tignan mo
lahat ng time deposits natin na may time deposit na at least P3 million, pagtatawagin
ninyo.” In short, si Mary naman nakita nya. “Mr. Cruz, meron tayong malaking deposit.
Maturity, February 15. Anong plano ninyo?” “Aba’y alam mo na yun iha. Wala naman
akong nalalaman. Retiree na ako. Umaasa ako sa interest na ibibigay nyo sa
kin.” Sabihin ko naman, “Sir, pasensya na kayo ah? Bumaba na naman ang interest rate.
Yung dating binibigay ko sa inyong one percent per annum, .8 percent per annum na
lang. And still subject to 20% withholding tax.” So in short, malungkot si Mr. Cruz. Sabi
ni Mary, “Sir gusto nyo bibigyan ko kayo ng mas malaki?”
So in short malungkot si Mr. Cruz
Sabi nung agent ng bangko: Sir gusto niyo offeran ko kayo ng mas malaki, sir 5% per
annum
Alright so in short mas malaki, yung depositor nenerbyosin yan, sasabihin niyan “ ay
nako ayoko niyan mukang scam yan “ (class laughs) diba kasi pag malaki interest scam
yan. Hindi sir hindi po ito scam, ganito usually ipapaliwanag niyan “ ah sir ganito po may
offering ang San Miguel, Preferred Shares , earnings 5% per annum ngayon yung
earnings nayan Dividendo yan, at pag dividendo ang withholding tax 10% lang, kaya
kikita na kayo ng 5% tanggalin mo ang 10% noon you will earn 4 ½ % per annum
compared to what you are going to earn on your time deposit, adi sabi ni Mr. Cruz “sige
ikuha mo na nga ako niyan” o ayon kaya ang dali raise niyan kasi ang mga bangko alam
nila kung sino ang mga depositors na pwedeng lapitan at ganun din yung mga
investment houses,
Yung mga investment houses deal with other merchants may mga pera yan naghahanap
din ng other forms of investments aalukin din yan kaya nowadays ah eto ha I read this
in the papers some weeks ago There is one corporation naglalakihan kasi San Miguel, JD
Summit, Gokongwei, Ayala Corporation, Ayala Land, SM, lahat yan naglalakihan at may
kanya kanyang projects si SM non stop pagtayo ng condominium buildings, everywhere
puro Sm Sm Sm, sa Edsa dikit-dikit na puro Sm, ngayon si Gokongwei Robinsons
naman, si Ayala ganon din, ah alright I don’t know if you remember dati ang sentro lang
natin Makati, kaya lang nung napuno na ang Makati eto nagdevelop naman si Ortigas,
kaya merong Ortigas Center, nung halos puno na ang Ortigas Center oh ayon Bonifacio
Global City eh ang Bonifacio almost puno narin, kaya si Ayala punta sa Taguig don sa
Food Terminal yung Arca South, oh ngayon nag offering din yan to construct kasi high
debris din yan, kaya because of the success of these big corporations nad because they
have been complying with their commitments, hindi pa approved ng SEC, hindi pa
registered yung securities nabasa palang sa dyaryo that halimbawa San Miguel intends
to offer 100 Billion of Preferred Shares, hindi pa approved yun ah plano palang, yung
mga investors pagtatawagan na yung mga investment houses kunyari BDO underwriter
ba kayo ng San Miguel, hindi … O ayala Kayo oo … state investment house oo .. so
alright in short oh pag nagoffer ha ipagtabi mona ako, nagpapareserba na wala pa ,
alright kaya nga nowadays by experience ha by the time na maaprove ni hindi na
kailangan pa magpaprint or magpa advertise ni hindi na nga iginagawa ng brochure, kasi
nabalita palang nag contact na “ oy ipagtabi mo ako ha kaya pag pinasama sama yung
pinareserba ng ibat-ibang client there is 400% over subscribed.
Ang ibig sabihin non kunwari ang planong iraise lamang ay 100 Billion, lahat ng nagsabi
ipagtabi moko nagtotal ng 500 Billion yun ang ibig sabihin ng nagover subscribe kaya
pag nagka ganon, you may not get what you may have wanted kasi ang gagawin naman
ng mga investment houses or universal banks lahat naman kayo client so sasabihin nun
“pasensya naha, ang naiassign lang sa amin so much, kaya ang ginagawa dinidistribute
lang talaga para yung mga client ng bangko are all happy, everybody happy, okay yun
ang underwriting of securities and you will get to know more about this.
At this eto lagi ko sinasabi sainyo magsimula na kayo magbasa ng business section ng
newspapers, this is where you will learn a lot, little by little, yang nalalaman ko about
business I did not acquire it overnight, I acquired it over 30 years kaya gradually initially
hindi yan interesting kaya lang overtime makikita mo ay kaganda pala, specially the new
city progress of the Big corporations and because of this progress the economy also
progresses kaya ayon pinagmamalaki ng gobyerno oh .8% growth rate 2 nd biggest in
asia, okay. Magbasa kayo sa umpisa tatamarin kayo siyempre kasi hindi niyo pa
naiintindihan pero gradually you learn and this is very important in the life of a lawyer.
Bakit ko to ito sinasabi? Kasi pag meron word sa business section that is not known , sa
business section naka define yan ang kagandahan sa business section and the intention
really is to inform the public, sige we’ll pick up from there.
***(continuation… February 12 meeting)
Now, the law says that a universal bank is a commercial bank that may also perform
the function of an investment house.
E ang tanong ano ba ang investment house? Yung commercial bank I already
mentioned the functions and one of them is the acceptance of deposit in checking
accounts and opening of letters of credit. These are inherent functions of a commercial
bank. Ngayon yun namang universal bank is a commercial bank that in addition to the
functions of a commercial bank it may engage in the business of an investment house.
Now, ano ba ang negosyo ng Investment house? Ganito yan, the business of an
investment house are rediscounting of receivables, that’s one. The other is
underwriting of securities.
Alright, Do you know of any investment house? Wala kayong alam na investment house?
Philiipine Investment House and State Investment House Inc.. Natatandaan nyo yung
case sa nego sa crossed checks? Ito yung Bataan Cigar Factory v. SIHI - State
Investment House Inc. Alright, ngayon meron pang isa, malaki din, it’s part of the
Yuchengco group of companies and its corporate name suggests that it is an investment
house. Ang pangalan nung corporation, House of Investments Inc., kaya pangalang
pangalan pa lang you can say “ahh, investment house yan.”
Ngayon, ano ba yung rediscounting of receivables? Alright, ganito ha, I already

mentioned this when I was talking about a central bank being the bank of banks and if
you would recall I said that if a bank needs more funds it can borrow from the central
bank and as collateral, banks offer yung kanilang mga receivables. Yan yung tinatawag
nating rediscounting of receivables.
Only banks can avail of the rediscounting facility of the Central bank, kaya lang it’s not
only banks that do business on credit, in fact there are many commercial establishments
that do business on credit – pagpapautang. One example, yung mga appliances stores.
Halimbawa, Automatic center, Western marketing, Anson’s, Western Marketing. Meron
pang isa, although yung isang ito wala ito sa mga mall, yung mga nabanggit ko asa mall
yun kaya lang one big appliance store dealer, yung Emilio Esting Appliances.
Alright, di lang yan ha, madami pa yan. There are many of them they sell on credit so in
short they have their paid-up capital which they use in buying appliances that they sell
on installment. Kaya you might be wondering, kung yan ay nagpapahulog, how come
their stores are fully stocked? Kasi pagkatapos magpautang ang gagawin ng mga yan
tatakbo sa investment house and sasabihin “ oh, ito mga receivables naming, pautang
nga, ito collateral.” Yung kanilang mga receivables. So, similar to this scheme that banks
have with Central bank - yun nga lang sabi ko sa inyo kanina, only banks can avail the
rediscounting facility of the Central bank. Other merchants they do it with Investment
houses. At yan ang tinatawag na rediscounting of receivables.
Ngayon, ano naman yung underwriting of securities? Alright, when you say
underwriting of securities, that means committing on a firm basis or best efforts to
raise the money needed by a client.
O ganito naman yan, I’m sure all of you have heard of San Miguel Corporation, ano ang
negosyo ng SMC? Alam nyo beer. Originally, ang negosyo ng SMC ay beer, kaya lang
later pag ikaw ay nasa negosyo at you’re going big, you should diversify. Kaya nung
Malaki na ang beer, syempre may limitations ang market. The market may grow but
don’t expect a big growth kasi may limitations ang market. Kaya if you want to earn
more, diversify. So, when SMC was big and it wanted to grow bigger it diversified to food
business, kaya ngayon merong Magnolia chicken, Magnolia ice cream, tapos meron
Monterey at Purefoods. Kaya lang nagkaroon ng change of management sa SMC, yung
dating Danding Cojuangco decided to step down. So ang nangyari ang nag takeover e si
Ramon S. Ang. Masyadong aggressive, so upon taking over, he decided that SMC should
further diversify. So, ano ang ginawa ni Ramong Ang? SMC shifted to power industry,
ang ginawa yung beer business, tinanggal nya sa SMC and became San Miguel Brewery
Inc., buhay pa yung beer business but it’s not being carried by SMC anymore but by
SMB- San Miguel Brewery. Okay, ngayon sabi ko sa inyo SMC decided to diversify to
power. Ngayon, nung nag diversify ang SMC to power, first move was to acquire all
shares of Petron Corporation. So SMC, made a tender offer for all Petron shares. Alright,
kaya lang yung mga wise na negosyante di binenta kasi nakita nila “aba papasok ang
SMC, gusto makuha ang Petron shares” kaya yung mga may isip they didn’t sell kaya
SMC was not able to acquire all share of Petron.
Alright, ngayon as SMC had diversified into power. SMC also acquired a lot of Meralco
shares. In fact there was a time SMC was one of the biggest owners of Meralco. Alright,
ngayon power industry, ang ginawa ng SMC nagtayo din ng mga power generating
plants. That’s why SMC now is the biggest generator of electricity, kaya lang
transmission lang yan, kung ano ang ginagawa ng power generators ng electricity ang
nagta-transmit nyan Meralco.
Alright, ngayon di pa tapos dyan, edi pinasok na ang power industry, aba nag diversify
pa, infrastructure,(may binanggit na company, PPV Or PTV?) gaya ng Skyway, yan nasa
Araneta, SMC yan. Ngayon, may ambition pa, nag offer gagawa ng bagong airport sa
Bulacan with a project cost of no less than 1 billion pesos. Kaya kung pag-iisipan mo
yung pagkakakuha ng Petron at Meralco shares, what is your estimate of the investment
to acquire Petron and Meralco shares? I’ll give you an idea, yung Meralco shares that
SMC acquired, some years later binenta din and ang bumii Gokongwei, yung presyo ng
Meralco shares na binenta ng SMC to Gokongwei? 82 billion pesos. Yung pagkakabili pa
lang nun malaking pera na, wala pa yung Petron, so in short we’re talking about
hundreds of billions of pesos.
Ang tanong, ganon ba kadami ang pera ng SMC, nagtatayo pa ng powerplants yan and
when you construct a power plant they are in hundreds of millions of pesos. Ang tanong,
ganun ba kadami pera ng SMC? Hinde. San kinuha ng SMC ang pera to acquire ang
Petron at Meralco shares? Okay, looking back, during those days SMC offered to the
public preferred shares, promising to pay those who would invest 7.5% per annum
return of investments. Hinde interest yun, kapag ang Corporation merong offer na
preferred shares, whatever it promises as return of capital you don’t call it interest as
they are dividends. Kahit na yan preferred shares, stock ownership yan kaya di interest
yan and as they are not interest they are dividends, they can only be given if a
corporation has surplus of profits.
Do you still remember Corporation law? So earnings on investment in equity kung

tawagin they are called dividends and they are distributed when a corporation has
surplus profits. Yung binabayad sa preferred stockholders, hinde yun tax deducitble ng
corporation kasi hinde yun interest.
Investment in form of bonds, binabayad dun interest which is tax deductible.
When San Miguel needed to raise big money to acquire Meralco shares to put up
generating plants, it offered preferred shares. Later, binenta ni SMC yung Meralco
shares, the buyer was Gokongwei which was 82 Billion. May ganun bang pera si
Gonkongwei? Wala! May lakas ng loob niya kasi alam niyo big businesses, it is very easy
for them to raise capitalization. How? They offer securities to the public.
Kanina, SMC offered securities to the public. Public means more than 19 persons. So
they offered shares to the public, SMC was able to do it. Why? Ang ganda ng offer! Rate
of return is 7% per annum, interest on time deposit was much lower. Kaya part of the
time deposit, they invested it in preferred shares.
Gokongwei bought shares from shares of SMC and Meralco, by offering bonds at rate of
5% per annum.
When SMC offered its shares to the public, when Gokongwei, thru JG Summit Corp to the
public, did they deal directly with the public? Ang laking hassle nun! Kayo, if you want to
acquire shares from SMC, to deal directly with SMC, ang laking hassle nun sa SMC. Best
to have an underwriter. There are a lot of entities who are willing to raise the money
needed by these clients, tawag natin investment houses. Marami yan.
Ang mga investments houses, House of Investments Incorporated. Universal banks

authorized by law to engage the business in investment house. One business of
investment houses is underwriting securities, committing on a firm basis or best efforts
to raise the money needed by a client. Mga universal banks, halimbawa BDO, may BDO
capital, Bank of PI, may BPI Capital.
Sa ngayon, if a corporation intends to raise money from the public by offering bonds or
offering preferred shares, hindi pa registered yung mga securities na yan sa SEC, people
interested are already manifesting their intentions to different underwriters.
Halimbawa, SMC nakuha yung project na airport, billions ang iraise nun. Ang gagawin
ko, I will ask the investment houses kung may allocation sila, unahan ko na ang SEC,
kahit di pa approve ng SEC, sabi ng bank, “baka”, tapos sasabihin ko pwede pa ireserve
mo na ako? In short, madami ang nagpapareserve. In the news, very recent, naklagay
dun the offering of a corporation has been oversubscribed by 400%. What does it mean?
If let us say that a corporation needs to raise only 1 hundred billion pesos, yung mga
interested, pag pinagsasama sama mo yan lahat aabutin 500B. Kaya lang iavail 100B
kasi yun lang inapprove ng SEC. pano gagawin ng universal bank yan or investment
house? Committing to raise on a firm basis money needed by client?
Simple lang. Kunwari sa BDO, in a matter of seconds, may list ako ng meron time
deposits, meron na akong list na may malaking accounts. Kunwari ako President
sasabihin ko, check mo nga yung mga may time deposits na 5M and up and those which
are about to mature, sa computer labas na agad. 1 minute labas na!
Tapos they will form a team, lahat na may time deposit na 5M and up, tapos tatawagin
isa isa and to offer the securities of these corporations. In fact, I frequently receive calls
and text messages from my bank, inaalok ako ng mga ganyan. Simple lang sasabihin
nila, “sir yung time deposit ninyo mag mature na anong plano niyoo?” most of those who
have time deposits don’t know anything about business so tatanungin nila, “paki renew
mo nalang. Gano kalaki ang interest? Umabot na ba ng 1% per annum?” Sasabihin ng
bank, “di sir. Bumaba pa nga eh. .08% per annum, may withholding tax na 20%.” So
maawa ka dun sa may time deposit. “sir gusto mo kumite ng mas Malakai?” “gano
kalaki” “sir, ok na bas a inyo ng 5% per annum? Kasi yun yung bond” tapos sasabihin
niya, “Ay ayoko niyan. Mukhang scam yan. Kasi pag Malaki earnings, scam yan” Tapos
papaliwanag yan. “Sir di po scam yan. Kilala niyo po si gokongwei? Cebu pacific,
Robinsons etc. Mag offer po ng bonds yan earning 5% per annum, gusto niyo sir, may
time deposit kayo ng 5M, kunin natin 3M, ikuha nating ng bonds, yung 3M kikita ng 5%
per annum.” O ngayon after having made a good presentation to the depositor,
sasabihin niya, “O sige, kuha mo ako!”
Kaya yung mga banks, malakas mag underwrite ng securities and going back to the
definition. Underwriter is committing on a firm basis or best efforts to raise the money
needed by the client.
Kaya ngayon yang mga big corporations nay an, Ayala, Gokongwei, SM, San Miguel, yan
pag nagparamdam palang sa news yan na plano, mga investors kumocontact nay an sa
underweirter ng securities, tatanong nila, may allocation kayo? Tapos sasabihin, meron!
Tapos sasabihin, patabi naman ako. Kaya minsan, nag ooverscribe. At the end of the
day, lahat were promised, kaya lang ang allocation is only so much. Kaya nangyayari,
kung nagpareserve 5M pesos worth, baka at the end of the day sabihin, “Sir ang natabi
lang namin sa inyo ay 500K.” Ganun talaga, kasi yung mga investment houses may
favored clients yan eh na kung ako ay ordinary client who placed an order eh ito ang laki
laki, syempre ikaw favored ka, kasi ako maliit lang.
Okay. Ganun rin experience namin dati whenever one corporation, ah, offered an initial
public offering. Kasi dati sinasabi naming, like in my case, when I was still investing in
this camp market, pag meron akong nakitang mag a IPO, tinatawagan ko na ang aking
broker, sabihin ko, “patabi mo na ako, so much.” Siya naman, “O, sige po.” Kaya lang
pag nag IPO na, sya, “Sir, naitabi na namin kayo ng ganito.Ang ibig sabihin kung ano
ipinareserva ko, pinagbigyan ako ng konti.
Kasi maraming malalaking investors, so syempre yung brokers will deal with malalaking
investors. Okay. Kung magbabasa kayo ng business section ng newspapers, okay,
parang nakita ko kanina or kaya kahapon, San Miguel will be making 300 Billion pesos
capital expenditures in the coming years. And nakalagay sa dyaryo, 300B, cap X. Yung
cap X, capital expenditure. Ibig sabihin, itong kukunan. Ngayon san kukunin ng San
Miguel yung capital expenditure? Dun kukunin sa securities. At ang makikipag usap sa
mga potential investors, yung mga underwriters ng securities, okay?
Kaya I’ve always been saying this, at this time, start reading business sections of
newspaper. And if there’s anything that you don’t understand, let me know. We can
actually talk about it in open class. So that when we talk about securities, you’ll
understand them better. Magandang topic yung securities. Ang gandang topic. Yun nga
lang, ang hirap ipaliwanag kasi, first thing, wala kayong fundamentals. Okay? Kaya lang
ang topic ng securities, it’s not easy, it’s not hard, it’s very easy to understand. Okay?
So ganun ang gawin nyo. Magbasa kayo ng business section ng newspaper. And if
there’s anything that you don’t understand, let me know and let’s talk it in open class.
Maliwanag?
So alam nyo na ang underwriters of securities? So yung underwriter of securities, yan

isa sa mga functions ng investment house. And as a universal bank, may also engage in
the business of an investment house, yung mga universal banks also underwrites
securities. Okay?
Ngayon, yung mga tinatawag na investment houses, ang tawag sakanila, quasi-banks.
Investment houses are also known as quasi-banks. Oh, maliwanag? So the business of
investment houses, is known as quasi banking. Kaya pag ikaw yung universal bank,
commercial bank ka na, quasi-bank pa rin. Okay? Ngayon kung gusto mo ,ay ,maganda
pala mag investment house. Meron ka lisensya for that.
Ngayon kung ikaw ay commercial bank at gusto mo magdagdag ng underwriting,

rediscounting of receivables, o e di walang problema, because under the law, a universal
bank is, at the same time, also an investment house. In mathematical formula,
commercial bank plus investment house, equals a universal bank O, malinaw?
Ngayon let’s talk about THRIFT BANK.
One is a savings and mortgage bank. Another is private development bank.

Another is a stock saving and loan association.
What is a savings and mortgage bank?

As defined in the law, it is a bank that accepts deposit of small depositors for the
purpose of home building. It’s a bank that accepts deposit of small depositors for the
purpose of homebuilding; again, a savings deposit bank is a bank that accepts savings of
small depositors for the purpose of homebuilding. Kung titignan mo yung definition, ano
yung mali? Yung depositor. Kaya di ako pwedeng mag depositor, kasi malaki ako. Kaya
sino pwede maging deposit? Dapat yung mga boarder lang. Now, what the law intends
is, yung deposits ang maliit. Okay, yung tinutukoy na small depositor, yung mga tao na
konti ang pera.
Alright, to illustrate: ikaw minimum wage eaner ka, and ah, well you want to start
savings for mortgage, kaya ang ginawa mo, every payday, from your pay, ah, you save
P100. Kaya in a month nakaka P200 ka. Kaya after a year, you now have P2400. Alright,
inipon mo yan throughout a year, kaya ang ginawa mo inipit mo lang yan o nakatago sa
loob ng kahon ng sapatos or elsewhere. Alright? Ngayon, nakaita mo, uy meron pala
akong P2400, e deposito ko na kaya sa banko eto. Alright, good diea. Ngayon syempre,
you want to keep your money in a safe place, deposit it in a safe bank. Kaya nagtanong
tanong ka na. Ano ba ang banking na matatatag? Yung maingat magpa utang. Alright, in
short, somebody suggested, edi bank of PI. Pinaka matanda yan sa Pilipinas. Alright, you
made up your mind. Pupunta ako sa Bank of PI. Alright, so you went to banko PI. Dala
dala mo P2400. You went to the account of the teller, sabihin mo “Ma’am, mag open po
account sa inyo” Sabi naman ”o, sige sir, upo muna kayo jan. O paki filled-up. Binigyan
ka ng specimen signature card.
Ngayon yung account teller, tinanong, “Sir, magkano po savings account nyo? Sabi mo
”Ma’am, yung akin pong lifetime saving account ay P2400. Sasabihin nung teller,
babawiin yung specimen signature card sasabihin “Sir, pasensya na po ah, hindi po kami
tumatangga ng ganyan kaliit na deposits. Nainsulto ka pa. Yung pinaghirapan mong
ipunin, minaliit. Kasi sir, ang initial deposit po namin ay P5000. Yung balance should not
go below P5000 kasi if it goes below, mayroon kang penalty na P200 a month.” Alright,
after calculating, “Ano, penalty? P200? E yan ang na e sa save ko per month. Ang ibig
mong sabihin yung savings ko, pupunta lang sa penalty?” So in short, so as not to
disappoint depositor, sasabihin nung taga banko PI, “ Sir, pumunta nalang kayo doon sa
aming sister company. Yung BPI FAMILY SAVINGS BANK. Sir, doon P1000 tatanggapin
nila. Ang maganda pa doon, meron na kayong atm card.” So in short, para ka na ring
mayaman na may ATM card. Kaya, you, dun ka mag deposito. Kaya savings and
deposit bank accepts deposit of small depositors. Okay?
O ngayon, to give you an idea, alright, ganito ah, dati merong Bank Filipino savings and
mortgage bank. Sinara yan ng Central bank for alleged insolvency. Ngayon, dahil
insolvent, isinara ng BSP right away, pasok ang PDIC. Because ang PDIC has to
indemnify all investors up to P500, 000. E ngayon, nun pumasok ang g PDIC, sa Banko
Filipino, kinuha lahat ng records of all depositors, with balances of not more than P10,
000. Kaya yung mga depositors with balances of not more than P10,000, right away,
ginawan na agad ng check ng PDIC. And in short, hindi na nila kinailangan mag file ng
claim. And they were already indemnified.
Ngayon, based on a news report yung binayaran ng PDIC agad with account balances of
not more P10,000.00 represented 93% of all depositors of Bangko Filipino kaya ang
lumalabas sa Bangko Filipino yung ang deposit lumagpas ng P10,000.00 umabot na ng
7% kaya kung makikita niyo yung hindi lumagpas ng P10,000 93%, kaya lang if you’re
going to consider these amounts deposited kapag pinagsasama yan millions of pesos din
yan so if they are idle hindi nakadeposit sa bangko oh hindi mapapakinabangan yan no
benefit to anybody kasi hindi tinatanggap kayalang mabuti may maliliit na bangko alright
tatanggapin ng bangko yan ready na ano gagawin ng savings bank diyan ipapautang
tanong anong loans? Housing loans kaya nga ang pangalan ay Savings and Mortgage
bank kaya kung ikaw balak mong bumili ng condo unit or a house and lot kaya lang ang
pera mo ay pang downpayment lang so where will you get the money to pay the
difference between the selling price and your downpayment saan ka uutang? Umutang
ka muna sa Pag-ibig Fund kasi sa pag-ibig ang pinaghirapan ay may katuparan oh diba?
Yung commercial huwag niyo kakalimutan yan. kaya lang gustuhin mo man sa Pag-ibig
ang problema hindi kapa qualified for a loan kasi kulang ka pa sa hulog and you have
acquire soon. Lahat ng bangko pwede kang maghousing loan kayalang eto ang problema
if you’ll go to a universal bank kahit naka advertise yan may housing loan kayalang if
you’re going to universal bank or even a commercial bank ang sasabihin sa iyo “sir itong
rates of interest na to ah that we’re quoiting you these are good only for 2 years after 2
years kapag tumaas ang market rates magaadjust tayo ah” alright delikado yan kasi
kung magfinance ka ng 2 million tumaas ang interest rate market by 1% yung 2 million
that’s 20,000 a year. ang tanong kakayanin mo ba yung increased amortization to cover
the additional interest? kung hindi mo kakayanin huwag kang kumuha ng loan sa
Universal Bank better deal with a Savings Bank kasi sa savings bank ang sasabihin sayo
“ang rate eto ang babayaran mong amortization for the next 10 years at least whatever
you would be told alam mo yung lang ang dapat mong paghandaan for the next 10 years
samatanlang kapag universal bank okay lang kung steady pero kapag gumalaw kahit 1%
nga lang ang laki ng impact numn sa amortization. Maliwang? So yun ang negosyo ng
Savings and Mortgage bank.
What is a Private Development Bank?
Alright ganito ah I said before yung pag kakaclassify ng banks diba ang pinakamalaki ay
Universal then Commercial, Thrift, Cooperative, Rural, Islamic yung pagkakaclassify na
yan is based on amount of capitalization.
Yung universal banks nowadays paid up capital at least 5 billion pesos. Ngayon yung
pinakamaliit naman Islamic. Alright.
Ngayon sabi ko sa inyo classification ng banks universal, commercial tapos thrift banks.
Sa thrift banks tatlo din yan and yung classification na yan ay also based on paid up
capital kaya sa thrift banks ang pinakamalaking paid up capital is for a Savings and
Mortgage Bank. Kaya lang you want to have a thrift bank but you cannot afford to raise
the money required for a paid up capital of a savings and mortgage bank. Dun ka sa
private development bank.
Ngayon eto ang kagandahan sa private development bank, if a private development

bank would need more capital which its stockholders may not be able to
contribute, a private development bank can invite Development Bank of the
Philippines to invest with it.
Kaya kunyari mayroon tayong private development bank, ang ganda ng negosyo natin
ang daming loan application. Unfortunately wala na tayong pera. In short, sayang
naman kung papakawalan natin yan. So what we will do is invite DBP to invest. Bale
sabihin natin sa DBP “We need so much are you willing to invest?”
DBP may invest yun nga lang ito masama. Syempre DBP will be investing money hindi
giving away money. DBP will like to oversee its investment and one way of doing it is
sasabihin ng DBP “okay we can contribute what you need kayalang dapat meron kaming
proportionate number of seats in the board of directors”
In short kung sa ngayon, ilan tayo directors kaya lang kunyari isa ka sa maliit among the
smallest capital contributors among the directors tapos papasok ang DBP. Ngayon ang
mangyayari siguradong tanggal ako. Yun ang masama. Kahit na ba ako ang incorporator
kaya lang ang participation ko naman ay maliit and DBP will be coming with a big
investment and it was proportionate participation to the board then some directors may
have to be ousted, replaced.
Do you know of any private development bank?
Ganito to recognize a private development bank, part of the corporate name is

the word development.
Dati meron dati marami-rami nabawasan na ng nabawasan dati kasi may Asian Trust
Development Bank. Ang problema Asian Trust Development Bank was acquired by Asia
United Bank and upon acquisition, nag-merge kaya nawala yung Asian Trust
Development Bank.
Dati meron din Premier Development Bank kaya lang yung Premier Development Bank
was acquired by Security Bank eh Security Bank walang merger yun. Ang ginawa ng
Security Bank after it acquired Premier Development Bank, ang Premier Development
Bank ginawang Security Bank Savings. So ginawang Savings and Mortgage Bank ng
Security bank kaya meron tayong Security Bank Corporation meron tayong Security
Savings Bank.
Okay ano pa? Eto buhay pa ito. Yung development bank once owned by Tambunting
Family Planters Development Bank. Sinundan niyo ba yung investigation kay Andy
Bautista the former Comelec chairman? Ano ba reklamo ng asawa niya? Dami daw pera
hindi siya binigyan nasaan daw ang pera? Saan naka deposito? Naandun sa Luzon
Development Bank. Ngayon kung may Luzon Development Bank, meron bang Mindanao
Development Bank? Meron. Nakita ko yan sa Mindanao. Ang hinahanap ko lang Visayas
Development Bank. Wala pa akong nakikita. Yung Luzon Development Bank, its owned
by Lim Kao Ko family. Malaki din pamilya yang Lim Kao Ko family malaki ya.
Basta ganun ah to recognize a private development bank tingnan mo lang yung

corporate name kasama sa corporate name ang salitang development.
Next, a Stock and Savings Loan Association.
Kaya ang tanong kung meron stock and savings loans association, meron bang non
stock and savings loan association? Meron.
So aside from the corporate structure anong pinagkaiba nila? Alright. Pag sinabing
corporate structure, pag sinabing stock edi meron kang authorized capital stock. Pag
non-stock, wala.
Alright ang pinagkaiba ganito: Yung stock savings and loan association, it can
accept deposits from the public. Again, yung stock savings and loan association can
accept deposits from the public. At pag sinabing public, more than 19 persons.
Maliwanag? Kaya wag kayong magugulat if one day merong magbubukas na savings and
loan association along Legarda or along C.M. Recto. Well, alam niyo noong 60s, 70s, and
80s, ang dami niyan! Ang dami niyan! Halimbawa, noong nagkaroon ng crisis that time
nung napatay si Ninoy Aquino. Yung isang savings and loan association nagsara. Yun
yung classic example ng domino effect. Lahat. Yung iba dapa. Sarado.
To give you an idea, during those days, meron akong natatandaang Pioneer Savings and
Loan Association. Andun mismo yun sa Buendia sa tapat ng ginagawang condo ng
Filinvest. And then kung ngagawi kayo ng Quezon City doon sa Espanya corner ng
Tomas Morato, may traffic light doon. I think the second building abandoned na. I think
it’s an 8 or 10-storey building. It belongs to the Homeowner Savings and Loan
Association – wala na yun, sarado na rin yun. Kaya yung building abandoned na rin yun,
sarado na sirang sira na. And then I remember, there were many, among the many,
meron dating Nation Savings and Loan Association. Dati meron ding Idea Savings and
Loan Association. Kaya lang they did not live up to their names. Kasi yung Nation, iisa
lang opisina nun. Hindi kalat sa Pilipinas. At yung Idea, nagsara na rin kaya hindi na
idea. Hindi rin nag live up to its name. Meron dating Permanent Savings and Loan
Association. Dapat pala temporary lang. (hehehe) Marami yan dati, kaya nga puro lahat
natumba.
Ngayon yung non stock meron ba kayong kilala? Meron yan. Mas malaki pa sa ibang
banko. AFPSLAI. Armed Forces and Police Savings Loan Association Inc. Kaya AFPSLAI.
At marami pang iba dun sa Boni Serrano, sa may Santolan Road. Pag galling ka ng C5,
kanan ka ng Boni Serrano, andun tabi tabi yan merong Air Material Wing Savings and
Loan Association Inc. (AMWSLAI), tabi tabi yan. Oh, meron pa, another group. Yung
Meralco Employees Savings and Loan Association.
Kaya ang tanong, ano nga ba ulit? Anong pinagkaiba? Pag Stock Savings and Loan
Association, it can accept deposits from the public. Again, pag non-stock, it can
accept only from a restricted group of persons.
Tulad niyan ng AFPSLAI, alam niyo antagal ko nang gustong mag deposit sa AFPSLAI.
Kase balita ko malaki daw interest ng deposits. Kaya lang hindi pwede. Because AFPSLAI
can accept deposits only from members of the Armed Forces of the Philippines, PNP, and
their family members. E ako wala. Kaya hindi pwede.
A non-stock cannot accept deposits from the public. Oh dun sa Meralco, binaggit ko
kanina, Meralco Employees Savings and Loan Association, as the name suggests, sino
pwede mag deposit dun? Eh di Meralco employees. Malaki rin doon ah. By this time ang
resources niyan nasa billions of pesos na rin. Malaki. Kasi yung MESALA (Meralco
Employees Savings and Loan Association), merong extended membership yan. Hindi
lang yan Meralco. The membership is extended to all employees of the corporations that
are part of this Lopez Group of Companies. Okay? Kaya ang dami niyan. Ang daming
corporations, that are part of the Lopez Group of Companies. Halimbawa, Rockwell,
laking kumpanya na yan. MIASCOR, engineering. Ayun, ang non-stock.
By the way, yung non-stock SLA (Savings and Loan Association) hindi yan bangko. It’s
not a bank. But if you intend to put up a non-stock SLA you still deal with the BSP. Kasi
licensing of a non-stock SLA also belongs to the BSP kaya kahit hindi bangko, licensing,
and regulation–BSP. Maliwanag?
O ngayon, ano naman yung next bank: Cooperative Banks.

Kayo ba nakapamasyal sa Pilipinas? Have you gone to 3rd 4th or 5th Municipalities? Dun
ba sa mga napuntahan niyo may nakita kayong branch ng BDO, BPI or Metrobank?
Saan? Wala naman doon. Kasi pag nagtayo yung mga yan doon, sigurado magsasara
agad. Bankrupt. Why? Kasi yung volunme ng business does not justify the cost. Kung
nakapamasyal talaga kayo doon sa mga malalayong lugar doon gaano ba kalayo ang
mga bahay-bahay sa isa’t isa at ano bang klase mga bahay nandoon? Edi bahay ng
farmer. Nang magbubukid. Aright? Dun ba may mga mansions? Wala!
Oh ngayon I’ve been around. Halibawa nagpunta ka sa isang lugar, sa isang 6 th

Municipality. Makikita mo mga bahay doon anlalayo sa isa’t-isa. Kaya kung meron kang
hinahanap nakalagay doon ‘Barangay so and so’. Ni walang numero ang bahay. Eto ah
tignan mo. Saan po dito nakatira si… Mariang Duling? (Hahaha) Kilala yon! Sasabihin ay
malapit lang ang bahay nun. Pakituro nga po. Ah ito ser ah aakyat muna kayo ng isang
bundok tapos meron pang pangalawa oh ser dun sya nakatira sa pang pitong bundok.
(hahaha) Ganun kalalapit sakanila! Tuwang tuwa ako e! Ang lapit raw? Eh ang layo
layo?! Tapos di pa makinis yung daan, tutungtong ka pa sa pilapil, magbabalanse ka pa.
(hahaha) kaya sa mga lugar na yun hindi magtatayo ng branch ang BDO, BPI at
Metrobank. Kasi yung volume of business will not justify the cost of the branch! Ang laki
ng cost ng branch: Branch manager, branch accountant, branch cashier. Oh e yung mga
clerks pa. Okay?
Atsaka pag mag branch nga naman ang BDO syempre yung ‘key means’ niya sa Metro
Manila dapat dala rin doon. Syempre yung branch dapat may aircon, nakabukas yung
ilaw, kaya kung iaanalyze mo, 8:30 palang naka-on na yung ilaw, di ba may aircon,
tapos wala namang customer? Kung ikaw branch manager syempre dapat magiissue ka
ng cost-cutting. Sasabihin mo sa guard: Guard! Meron bang parating na depositor?
Tingin yung guard. Ser wala po akong nakikita. O sige sara mo na muna yung aircon,
isara mo na muna yung ilaw para maka-cost-cutting. Oh e yung guard, ser may
parating! Oh sige on mo na yung ilaw atsaka yung aircon. (hahaha) pwede ba naman
ganun operation mo?! Kaya nga lang kawawa mga farmers. Yung mga farmers kailangan
din nila ng banking services. Kaya merong Rural Banks. Rural banks are organized to
provide banking services for the agricultural sector.
(Prayer)
Oh balikan natin yung distant communities. Mga farmers. Ngayon, if you were a farmer
ano ba usual requirements mo? First yung baka. You will need seeds and fertilizer.
Alright? And you would need other things. Ngayon kung ikaw small farmer bibili ka ng
seeds doon sa supplier, if you would be buying only a small quantity, certainly, yung
presyo nun mataas. At yung magdedeliver na van, syempre sisingilin ka pa ng delivery
charge. In short, if you will do it alone, by yourself–your costs will be high.
So ang magagawa natin, if tayo ay pare-parehong farmers, in one area, ang magagawa
natin, let’s pool our orders. Kaya halimbawa, ako 200 sacks lamang, kayo, pare-pareho
kayong tig-200. So if four of us will be buying one at a time, dealing individually with the
suppliers, tataas ang costs natin. Ngayon, if we what we do is pagsama-samahin natin
yung orders natin. Kaya halimbawa yung supplier, sabi niya ang capacity ng truck niya
1000 sacks, eh di paabutin natin yung order natin ng 1000 sacks. Then we can demand
a lower price. If kung sabihin ng supplier na may delivery charge, then we can say na
walang delivery charge, tanggalin mo yan. In short, the supplier won’t lose the business,
it will be willing to sell at a lower price. Kaya yung mga farmers, in certain areas they
form cooperatives. Kaya seeds cooperatives, fertilizers tapos di naman lahat may truck,
so pwedeng silang transport cooperatives. Yung mga pesticides, makakamura sila if they
buy in bulk. Ngayon, maraming cooperatives have been successful. Daming pera niyan,
millions. Ang tanong, if you are a cooperative, you have a lot of money, where will you
keep your money? Sabi ko nga sa inyo, sa mga lugar na yan, walang branch ang BDO,
BPI, Metrobank, and the other big banks. Wag mo naming sabihin na pupunta pa kami
sa bayan para mag-deposit at mag-withdraw. Pwede sana sa rural bank, kaya lang risky
rin. Kasi maraming rural banks, na-bankrupt na. So kung risky, kasi malaki ang pera ng
cooperative, it may even be bigger than the capitalization of the rural banks. Kaya ang
ginawa nung ibang cooperatives, who have already amassed a big amount, ang ginawa
nila sila ang nagtayo ng sarili nilang banko, at yan ang tinatawag natin na cooperative
banks. So yung mga cooperative banks, this are banks organized by cooperatives.
Now what are Islamic Banks?
Kapag sinabing Islamic Banks, it is one organized to provide banking services in

Muslim dominated areas. In Muslim dominated areas, sigurado ako walang malapit na
BDO branch, wala ring BPI, wala ring Metrobank, wala ring RCBC. Why?
If you want to attract deposits, if a bank wants to attract deposits, ano ang ginagawa ng
banko? If offers interests. Kung banko ang magpapautang, how will a bank earn? From
lending and also by collecting interests. In Muslim dominated areas, puro Muslim yan,
marami.
In Islam, charging interest is immoral. Kaya pano ka naman makaka-attract ng deposit

at kapag nagpautang ka paano ka naman kikita? Sasabihin mo sa Muslim magbayad ka
ng interest, eh yung Muslim sasabihin immoral samin yan. Kaya lang kawawa naman
sila, they also need banking services. Kaya legislature , Philippine legislature, legislated
an Islamic Bank. Yung Philippine Al-Amanah Islamic Bank. Ngayon, may branch bay an
ditto sa Legarda? Wala. Sa Mandaluyong? Wala. Pasig? Wala. Bakit wala? Eh konti ang
Muslim diyan. Doon lang sa maraming Muslim. Kawawa naman sila, wala silang banking
services.
Kaya government created one for them, kaya lang hindi elsewhere meron. Doon lang sa
mga areas where there are a lot of Muslims. Now, you might ask, kung yung bang
Islamic banks nagpapautang? Yes. Yung umuutang di magbabayad ng interest? Yes.
Pero ang tanong paano kikita ang banko? Based on what I was told, yung borrower
shares with the bank his profits. Kaya nga kung titignan ninyo yung laws on partnership
natin, Civil Code. That a partnership is not created, simply because there is an
agreement about sharing of profits. Yan ang best example.
Now, here are very basic rules.
1. All banks should be organized as a stock corporation.
2. Another, no bank may engage in the business of insurance as an insurer.
Yung tinatawag na universal bank can engage in the business of insurance selling
insurance policies. Kaya lang wala kang maririnig na kahit na anong banko that is an
insurer, kasi bawal. Dalawa ang bawal. Doon sa Insurance Code, bawal ang insurance
company mag-banking. Sa General Banking Law, bawal naman ang banko mag-
insurance business as an insurer. Bakit ganun? Kasi yung dalawang negosyo nay an,
they are seriously incompatible. Why? Banking should be secured, as much as possible,
no risk assumed. Ang tanong ano ba ang negosyo ng insurer? Eh di the assumption of
risk.
Another reason why they could not do the other’s business, kasi banking is regulated by
the Monetary Board, insurance is regulated by the Insurance Commissioner. Kaya if one
corporation will be allowed to do the two businesses, then it will be subject to two
regulators, which is similar to having two wives. Ang gulo nun. Isipin mo ang susundin
mo dalawa. Okay sana kung consistent sila pero pano kung ang sabi nung isa, dapat
Monday to Saturday dito ka, Sunday ka lang dun sa kabila. Sabi nung isa, hindi, Monday
to Sunday dito ka na. Di ang laking problema nun. Who do you follow? Kaya ang
kinakailangan, serve only one master, have only one wife.
Only corporation under the supervision of the Monetary Board may add to its corporate
name may add the word bank or banking. Kaya pansinin niyo lahat ng banko, Security
Bank Corporation, BDO Universal Bank, Bank of P I, Rizal Commercial Banking
Corporation, BPI Family Savings Bank, Philippine Savings Bank. Kaya halimbawa ang
negosyo mo ay seeds and seedlings, kaya meron kang seeds and seedlings bank. Kaya
lang yung corporate name mo, hindi pwedeng Mendiola Seeds and Seedlings Bank
Corporation. Di pwede. We can allow, tawagin mong Mendiola Seeds and Seedlings
Corporation, kaya lang di mo pwedeng isama yung salitang bank. Ano pa? Yung mga
blood bank. Wala ng mga blood banks ngayon. Kasi basta tungkol sa dugo, Red Cross na
yan. Kaya lang meron pang isang bank, sperm bank. Yung mga animal grower, piggery,
ranches, basta nagpapalaki ng hayop, aside from poultry, wala naming sperm bank ang
poultry. So yung mga rancho, yung mga piggery, yung mga yan, if they want to improve
their stock, gusto nilang iimprove yung mga breed nila, ang ginagawa nung mga yan,
merong mga sperm bank yan. Which they use for artificial insemination. Kaya kunwari
lang, tayo yung corporation nay un. Meron tayong sperm bank. But we cannot call our
corporation Mendiola Sperm Bank Corporation. Ang itatawag na lang natin Mendiola
Sperms Corporation. Kasi yung salitang bank, hindi nga pwedeng gamitin kung hindi ka
under ng BSP.
3. Another simplified rule, a universal bank may own another universal bank,
on the other hand a commercial bank may own another commercial bank.
Ang ibig sabihin niyan yung commercial bank cannot own a universal bank, but a
universal bank can own something as big or even smaller. Kaya lang ang small cannot
own something bigger. Have I explained to you the difference between merger and
acquisition? Pag sinabing acquisition, you acquire controlling interest in one corporation.
Very common sa atin, pag meron kang acquisition ng banko, there results in merger.
There used to be Equitable Banking Corporation, it acquired PCI Bank, so ano nangyari,
naging Equitable PCI Bank kasi nag-merge. Survivor is equitable bank, na-dissolve PCI.
Kaya lang ito mismong equitable pci bank was acquired by banco de oro, and what
transpired later was a merger. Survivor, banco de oro, nawala yung equitable pci bank.
So yun ang acquisition resulting in a merger. Kaya nga sabi ko nga sa inyo, hindi lahat
ng acquisition result in a merger.
In the 80’s, ang daming acquisition sa Amerika. Kaya lang wag na sa Amerika, dito lang
sa local. Alam niyo si Uncle Henry, madaming pera yan. Di ba, BDO kanya yan. Meron pa
siyang ibang banko. One other bank that belongs to Uncle Henry is China Banking
Corporation.
Well just to give you an idea, dati merong tatlong malaking chinese bank, Equitable
Banking Corporation, China Banking Corporation and Philippine Bank of Communications.
Well si Henry, ang una niyang banko was Acme Savings Bank which later became Banco
De Oro. Now nung lumaki ng lumaki na BDO, it merged with Equitable. Kaya lang Henry
Sy also owns China Bank. Hndi niya pa minemerge yan, well reason is pride niya.
Alam niyo mga tsinoy, pride nila having acquired the old corporations in the Philippines.
Halimbawa Lucio Tan, Lucio Tan was able to acquire Philippine National Bank, kaya yan
ang pride niya. He was also able to acquire Philippine Airlines, kahit yung mga
pinagbibili niyang mga yan eh puro palugo na iyan dati, cause they were run by
government. Alam niyo naman, if government runs any business, that business
becomes bankrupt. Government is never good in business, kaya kahit na bankrupt na.
kasi mga old corporations, yan pa yung mga pioneer, Philippine National Bank, that’s the
first government bank. Nung na privatized, si Uncle Lucio naman nung ibinenta
Philippine Airlines, binili din niya kahit palugi. Ngayon si Henry Sy, nangongolekta ng
banko yan. Dati may banko yung Puyat Family, ang banko ng Puyat family dati ay yung
Manila Banking Corporation which was a commercial bank, kaya lang the Puyat family,
family members nagtatandaan na and the children are not interested in banking, ang
ginawa ng Puyat family is binenta yung Manila Bank. Meron ba kayong nakikitang
Manila bank? Wala. Eh sino bumili? China Banking Corporation. So China Banking
Corporation bought Manila Bank and turned it into its China Bank Savings. Kaya
makikita niyo meron diyang mga branches na China Bank Savings. Si Uncle Henry,
meron pang isang banko na binili, it’s the bank of the Tambunting family, yung Planters
Development Bank, kaya lang yung mga matatandang Tambunting, mga 70 years old
and above na iyang mga yan. So in short, they decided to sell the bank, ang bumili rin is
si Uncle Henry. Anong ginawa ni Henry sa Planters Development Bank? Wala, nandiyan
lang and let it operate separately. Kaya yan ang example ng acquisition without a
merger. Isa pa, Henry Sy also acquired a rural bank in Mindanao, the biggest yung One
Network Bank, rural bank yun, madaming branches yan sa Visayas and sa Mindanao,
ang branches niyan I think is about by this time is mga 200 na. So that’s another
acquisition where it has kept its separate identity. Kaya tandaan niyo palagi, not every
acquisition results in a merger or consolidation, because the one acquiring may want to
keep the separate identity of the corporation that it acquired.
4. Another very basic rule about banking, a universal bank may engage in both
allied and non-allied enterprises. On the other hand, a commercial bank can
engage only in allied enterprises.
Pag sinabing allied, yung negosyo related sa banking. Ngayon example ng non-allied the
universal banks engage in, yung tinatawag na Bancassurance. Ang tanong, ano ba yung
bancassurance? Yung mga universal banks, they engage in the business of insurance not
as an insurer but simply selling insurance policies. Yun ang tinatawag na Bancassurance.
Kaya nga mapapansin ninyo, ang lalaki ng mga income ng universal banks ngayon, kasi
one lead source of income for universal banks yung bancassurance, at mapapansin niyo
rin yung mga insurance companies that are identified with banks they have grown very
big. Why? O example muna, yung Ayala Group ang banko niyan, Bank of Philippine
Islands, ang property insurer niyan dati ay FGU, wala nang FGU, yung FGU naging BPI
MS. Ngayon, ang Ayala Group, o BPI group yan meron silang life insurer, Ayala Life. Ano
nangyari sa Ayala Life? Wala narin. Kasi kinakailngan magdagdag ng capital, so Ayala
Life had to accept a new investor, kaya ang pangalan ng dating Ayala Life ngayon is BPI
Philam Life. O Yuchengco group, RCBC, yung RCBC meron yang life insurer, Great Pacific
life assurance corporation, dating grepa life. O ngayon dahil maganda ang
bancassurance, it had to accept additional capitalization at ang pumasok SunLife, kaya
nga yung Sun Life of Canada Philippines Incorporated, kaya lang nag-invest ang SunLife
sa Great Pacific Life, and apparently mas malaki ang investment, kaya yung dating Great
Pacific Life ang pangalan na ngayon ay SunLife Grepa. Kasi magandang pagkakitaan
yung bancassurance.
Ngayon pano yan kumikita? O ganito, ano ba yung negosiyo ng banko. Eh di

nagpapautang. O kunwari ikaw, ako banko. Uutang ka sakin, so purpose is
homebuilding. So sabi ko, ito requirements namin ha, mortgage over land. Dahil
magpapatayo ka ng structure, the mortgage should extend to the structure
Ngayon kinakailangan naka-insure ‘yung ipapatayo mo. Ngyaon dapat ipa-insure mo sa

amin. Ok? Kumisyon na agad ‘yun. Ma'am dapat dahil pautangin ka namin, dapat eh par
a kung sakaling may magyari sayo we won't foreclose the mortgage anymore, dapat you
take out mortgage and indemnity insurance. Dapat sa amin mo din kukunin. In short, la
hat ng insurance na kailangan mo, kinakailangan kunin mo sa bangko. That's why banks
are making a lot of money nowadays because of their bancassurance. Maliwanag?
Kaya nga naglalakihan ‘yung mga insurancecompanies that are identified with banks. Ka
si ang mga insurance companies cannot just keep on accepting and accepting risk. Kaila
ngan may katapat ‘yan na paid up capital. Kaya lahat sila nagdagdag na ng nagdagdag n
g paid up capital. Kaya naman naglakihan ang mga insurance companies at saka lumaki
na ang income ng mga bangko. Kaya nga of all banks, it is only a universal bank that ca
n do bancassuranc. Maliwanag?
Question. Kilala niyo naman si Manny Pacquiao ‘di ba? By your estimate, gaano kaya kar
ami pera niyan? Well by my estimate billionaire yan. Billionaire no? No doubt billionaire ‘
yan. Kaya nga gusto makuha ng BIR ‘yung billions niyan. Alright. Ngayon if you were Ma
nny and you would be very prudent, veru careful about what you earn over the years, ku
ng magdedeposito ka sa bangko hangang magkano labg idedeposito mo sa bangko? Aba
edi dapat bawat bangko 500,000 pesos lang. Kasi ‘yun lqng covered ng PDIC. Oh ngayon
, sa bilang ninyo, ilan ang universal banks sa ngayon? I would say about 10 universal ba
nks. Nagkaubusan na kasi ng bangko because of a lack of merchants. Ngayon, kung sam
pu at ang bawat bangko and insured lang sa PDIC, 500,000. So kung ako si Manny, sa la
hat ng universal banks, hangang five million lang ang pwede kong ideposito. Oh ngayon,
eh billion yan. Saan ko idedeposito ‘yung iba. Edi ikakalat ko. Universal banks, BPI Famil
y Savings, Philippine Savings, Sterling Bank of Asia. In short, kulang parin kasi pinaguus
apan billions e ito nasa ano pa lang tayo, nasa millions pa lang. Kaya kulang na kulang a
ng bangko.
So ang tanong, if you were Manny, and you want to be very safe with what you have, an
o kaya papasok sa isip mo? Edi magtayo na ako ng sarili kong bangko. ‘Di ba? Kasi sarili
ko nang bangko un ako na magmamanage niyan. Kaya ang tanong ngayon ito. Can Man
ny be a director or officer of any bank? Alright. Of course kung ginamit mo ang Corporati
on Code, of course! Kasi Sa laki ng shareholdings niya siyempre he can make himself as
a director. Kaya lang, hindi pwede because under the law, to be a director or even officer
of a bank, one must pass the fit and proper rule. Term yan sa law. Ngayon, the Monetar
y Board issued the qualifications pursuant to thr fit and proper rule and what I noticed in
the circular from the Monetary Board, one must be a college graduate. Kaya talo natin si
Manny. Kasi tayo pasado, pasado sa fit and proper rule. Siya hindi. Marami nga siyang p
era, ‘di naman siya qualified. Tayo walang pera, qualified. Maliwanag? Alam niyo naman
saPilipinas, si Manny naging senador kasi ang qualifications para maging senador, natura
l born citizen and must know how to read and write. Ganun rin to be President of the Phil
ippines. Kaya makikita niyo because of the very little qualifications to be a national leade
r, ang Pilipinas nandoon parin sa ilalim. Ang tindi naman ng requirement to be a policem
an. You should br a college graduate. Kaya ‘yung mga pulis natin baka pumasa sa fit and
proper rule. Si mayor Estrada or dating president Estrada, hindi rin papasa. Si Manny, ‘di
papasa. Alright.
SINGLE BORROWER’S LIMIT
May any person borrow any amount from the bank if he could fully secure whatever he's
borrowing? The answer is no.
Kasi meron ngang tinatawa na single borrowers limit. Baka akala niyo pag sinabing singl
e borrowers limit ‘yan ’yung pinakamalaking halaga na pwede utangin ng walang asawa.
Kasi single borrowers limit. Pag sinabing single borrowers limit, it is the maximum amou
nt that any borrower, single, married, widow, widower, partnership, corporation, could b
orrow from a bank. Even though that person could put up a lot of collateral basta kung
magpapautang ang bangko, hangang diyan ka lang. Ok?
Kaya nga ‘yung mga big corporations, whenever they need money, hindi na sila umuuta
ng sa bangko ngayon. Kasi sobra ang laki ng pangangailangan that banks cannot lend in
dividuallly. Kaya dati when we speak of ____ we have not yet discovered good source of
fundd, fot their expansion programs, ‘yung mga big corporations dati kinakausap maram
ing bangko.
Sinasabi “Halika meeting tayo. Meron kaming ganitong project. Kailangan namin ng fina
ncing ninyo. Kaya niyo ba?” In short iisa-isahin yan. “Ikaw hangang ano kaya mo? Ikaw
hangang ano kaya mo?” Kaya dati ang mga bangko may kanya kanyang single borrower
s limit at siyempre mas maliit ang paid up capital, mas mababa limit. Mas malaki, mas m
alaki. Kaya during those days ‘yung mga tinatawag na syndicated loans. Akala mo syndic
ated masama? Hindi. Kasi krimen yan utang ng sindikato yan. Pag sinabing syndicated lo
ans, these are loans put up by different banks because not one of them can lend the enti
re amount because of their single borrowers limit. Kaya ang nagyayari, all these banks, t
hey agree to put up what a big corporation needs for its programs. Maliwanag?
5. A bank must hire employees on a permanent basis.
Kaya sa bangko hindi pwede and endo, hindi pwede ang contractualization. Kasi by expr
ess provision by law, a bank must hire employees on a permanent basis. And the reason
for this is siyempre secrecy law. Kasi nga naman kung ako bangko, and I would hire you
only for 5 months, after 5 months out ka na. Edi ‘yung mga nalaman mo during your 5
months stat, pwede mo na ipagkalat. Kasi hindi ka na bank employee. Kaya under the la
w, banks should hire employees on a permanent basis. Maliwanag? Ok.
6. If a bank put up a branch or even move a branch or install an ATM, lahat ‘yan
needs prior approval from the Monetary Board.
Kaya ang bangko hindi pwede basta magtayo ng branch. Sabihin maganda yung lugar na
yan. San Beda’ yan. University na. Magtayo tayo ng ATM diyan.” Hindi. Kinakailangan ng
prior approval ng Monetary Board. Ok? Alright.
DOCUMENTS OF TITLE
What is a Document of Title?
It is an instrument wherein taking it acknowledges goods and it contains an undertaking

to deliver those goods.
Kapag sinabing BAILEE, he is a person in possession of things belonging to another.

Hindi kanya yun. He is in possession of things belonging to another.
Ngayon, the common bailees are common carriers and also the warehouseman. Yung
common carrier, let’s say you have a truckload of cartons of milk and you want these
transported, so it’s with the carrier. It’s with the bailee. Ngayon kung bodegero ka
naman at ang business mo ay warehousing, it short, you have a very good structure and
inside your structure are goods belonging to others that are in storage in your
warehouse. Kaya ikaw as a warehouseman, bailee ka din. So again, when you talk about
Documents of Title, you talk about bailees.
The most common forms of Documents of Title are BILLS OF LADING, which are issued
by common carriers, and also WAREHOUSE RECEIPTS, which are issued by a
warehouseman.
Ngayon, doon sa Civil Code, may binanggit na QUEDAN. A quedan is actually a

warehouse receipt. But customarily, kapag ginamit mo yung salitang QUEDAN, the goods
covered are either rice or sugar or tobacco. Walang quedan over cement. So it would be
improper to say that you have a quedan over a cement kasi nga limitado lang yung
nakasanayan na kapag binanggit ang salitang quedan, it’s either over rice, sugar or
tobacco.
Documents of Title can be issued in a NEGOTIABLE or NON-NEGOTIABLE FORM.
How would you know if it’s negotiable?
Kapag negotiable instruments, see if it complies with Section 1 of the NIL para masabi
mong negotiable ang instrument. To find out if a document of title is negotiable, simply
look for the words of negotiability. Yun lang. No Section 1 to memorize.
What are the words of negotiability? Same as those that you learned in Negotiable
Instruments Law. They are “to order” or “to bearer” or words or phrases with an
equivalent meaning.
Kung halimbawa, ako warehouseman and you want me to issue a negotiable warehouse
receipt for the goods that you have stored in my warehouse, then you can tell me, ‘Boss,
lahat ng resibo ilagay mo diyan deliver to bearer.’ Pwede ring, ‘Deliver to the order of
Jose Cruz.’ Since the words of negotiability are there, “to order” or “to bearer,” then all
the warehouse receipts that I shall be issuing are all negotiable.
Ngayon, kapag sinabi mong “to order,” it could be “Deliver to the order of Jose Cruz.”
Pwede ring “Deliver to Jose Cruz or order.” Pwede ring “Deliver to bearer or Jose Cruz”
or “Deliver to Jose Cruz or to bearer.”
Hindi pwedeng “Deliver to bearer Jose.” WHY? In that case, that’s to be delivered only to
Jose Cruz who had been identified as the bearer.
What’s the reason for negotiability? Why do we have negotiable documents of title?
FACILITATE COMMERCIAL TRANSACTIONS. Para mapabilis ang bentahan ng gamit

at mga bagay bagay.
How does negotiability facilitate commercial transactions?
Simple lang, nagpatago ka sa aking bodega ng 500 cases of fresh apples. Gusto mo ng
ibenta. May nakausap ka ng buyer. Ang problema sa buyer, ang sabi “wag mo muna
ideliver kasi wala pa akong paglalagyan sa aking bodega.” Now what you can propose is
“Sige na bayaran mo na ako para maka-order na ako ng next shipment ko in time for
midyear. Ipapasa ko sayo yung aking warehouse receipt. At your convenience, ikaw na
ang mag-claim sa public warehouse.” Because of that arrangement, kasi negotiable yung
warehouse receipt, yung buyer mo pumayag na at siya na ang kukuha sa bodega.
Again, the purpose of negotiability of documents of title is to facilitate commercial

transactions. At ganon din yung purpose ng negotiability of instruments – to facilitate
commercial transactions. To illustrate it, dun sa negotiable instruments: One day,
pumunta ako sayo. Sabi ko “friend, pwede ba pautang ng 5,000.” As we are friends, you
cannot say no. Kaya pinautang mo ako. And for which I made and issued to you a
negotiable promissory note for 5,000. The promissory note na aking ginawa, nilagay mo
lang sa wallet mo. Then, while you are passing by a certain shop, nakakita ka ng item na
gustong gusto mong bilhin and you wanted to own. Ang problema mo, wala ka ng 5,000
dahil yung 5,000 mo, inutang ko. Ang tagal mong nakaktitig sa item na yun. And the
owner of the store noticed that you’ve been staring at that item. Kaya maaring hindi na
nakatiis, kinausap ka na. “Dalawang oras ka ng nakatingin diyan, gusto mo ba yan?” Ang
sabi mo, “oo kaso ang problema ko wala na akong pera. Kasi yung 5,000 ko, nautang na
ng bestfriend ko.” Yung may-ari ng tindahan, siyempre, gustong kumita. Nung sinabi ng
potential customer na pinautang niya, tinanong ng may-ari ng tindahan “binigyan ka ba
ng promissory note?” Pinakita ang promissory note.
Yung may-ari ng tindahan, nag-aral pala ng Negotiable Instruments Law. Alam niya
yung Section 1 and Section 52. Tinignan niya, it qualifies as negotiable under Section 1.
Sabi niya, ito, payee ito. Hindi siya pwede maging holder in due course kasi para maging
holder in due course, dapat nailipat sayo through negotiation. Ngayon, gusto mo na
kumita. Sabi mo, “sige ma’am, ibibigay ko na sayo yang item na iyan. Ipambayad mo
itong promissory note na ito. Paki-indorse. “ Malakas ang loob niya kasi alam niya ang
rights ng holder in due course. In short, naka benta na siya. Wala siyang hawak na cash
pero on due date doon sa promissory note, kikita na siya. Malay mo yung puhunan niya
doon 4,000 lang tapos binenta sayo ng 5,000. On due date, may kikitain siyang 1,000.
In short, because that was a negotiable instrument, a commercial transaction was
facilitated. Kasi malakas ang loob ng merchant.
So yung merchant, nakabenta na. Ngayon, kung merchant ka, kung anong naibenta mo,
kailangan mong ireplenish. So yung may-ari ng tindahan, having sold, tumawag yung
supplier. Sabi nung supplier, “patingin nga nung promissory note.” Nag-aral din pala ng
NIL. Negotiable tapos alam din niya yung Section 52. So yung pinambayad sayo na
promissory note, yun din pambabayad mo.
At yung pumirma ng promissory note, pwede ko din habulin. Kaya, I have nothing to
worry kasi tatlo ang pwede kong habulin. Does he qualify as a holder in due course?
Alam niyo naman, a holder in due course holds the instrument not subject to any
personal defense. Kaya, siguradong sigurado siya. Yan ang ibig sabihin ng facilitating
commercial transactions. Maliwanag. Kasi kapag alam mo ang law, alam mo ang rights
mo, you will be more daring. Yung ayaw patulan ng iba dahil walang cash, pwede mong
patulan kasi kita mo naman, kikita ka naman. So, yun ang purpose ng negotiability.
Ngayon, so as I said earlier para makita natin na negotiable and document of title, dapat
nakalagay na deliver “to order” or “to bearer” or words or phrases with an equivalent
meaning. Pag sinabi mong “equivalent meaning”, Instead of writing “to bearer” baka
nakalagay “to holder” or if not, baka nakalagay “to possessor”. Malinaw?
Nagyon ang tanong nakalagay diyan “deliver to bearer”, so negotiable yan, kaya lang
yung printed form nung bailee, it could be a warehouseman or a common carrier, lahat
nakatatak “NON –NEGOTIABLE” kaso nakalagay naman sa taas “deliver to bearer”, the
question is: what kind of document of title is that? Negotiable pa rin. For as long as the
words of negotiability are there although the document says it is non-
negotiable, the holder may treat is as negotiable.
Kaya kung ikaw may hawak and you want to treat it as negotiable, sige.
How may the document of title be negotiated? Ganito ang pag sagot niyan ha, you have
to qualify. If it is an Order document, the holder negotiates it by his INDORSEMENT
FOLLOWED BY DELIVERY. But if it is considered as a Bearer document, the holder
who negotiates it, NEEDS ONLY TO DELIVER. So maaaring sabihin niyo, naku parehas
pala sa Negotiable Intruments Law, kapag Order, kailangan ng indorsement followed by
delivery, kapag Bearer naman delivery lang.
Ngayon, ano naman ang pinagkaiba sa Negotiable instruments? Sa Negotiable

Instruments, there are five ways of indorsing but when you talk about documents of
title, documents of title are indorsed only in any of two ways: pwedeng IN BLANK,
pwedeng SPECIAL.
Okay, an indorsement of a document of title can be In blank or Special. Sa Negotiable

Instruments, meron pang three others: meron pang Conditional, meron pang Qualified,
meron pang Restrictive sa negotiable instruments. Sa documents of title, dalawa lang
yung form of indorsement. Kung hindi man in blank, special. Pag sinabing In blank, ang
ginagawa pumipirma lang, not stating the name of the transferee. At para masabing
Special, the person indorsing states the transferee. Oh maliwanag?
Ngayon, anong pang pinagkaiba? If you would recall when you were taking up
Negotiable Instruments Law, your prof may have said “An instrument that is originally
bearer always stays bearer.” Ang ibig sabihin, kahit nagkaron ng special indorsement
yung bearer instrument, that can still be further negotiated by mere delivery. Kaya lang
iba sa documents of title. Under the Civil Code, once a document of title is
specially indorsed, kahit na iyan ay originally bearer, future negotiations shall
by be indorsement followed by delivery.
Kahit na ang indorsement ay in blank yung huli, still, dahil nagkaroon na ng special
indorsement, kinakailangan na all future negotiations shall by be indorsement and
delivery. Maliwanag?
BILLS OF LADING
The law that especially governs Bills of Lading is the Code of Commerce. What is a bill of
lading? It is a document that a common carrier issues upon acceptance of goods
to be transported.
As required sa Code of Commerce, all bills of lading should be printed. Baka akalain niyo
eh na noong ginawa yung Code of Commerce, wala pang printing technology. Kaya ang
tanong, using your imagination, kung ikaw ay common carrier at that time, ano dapat
printed sa bills of lading mo? Using your imagination. Di naman mahirap na pag-isipan
‘yan. Ako, common carrier. Sa Code of Commerce, dapat ang bills of lading mo printed.
Kaya anong ipapaprint ko? Eh di siyempre pangalan ko muna, ABC Transport. Tapos
complete address. Iyon lang. Name and complete address of the carrier.
Alright, noong ginawa ‘yong Code of Commerce, wala pang telepono. Kaya lang
nowadays, pag ang common carrier napa-print ng bills of lading, nakalagay na ang
telepono. Then later, nagkaroon ng facsimile number. Kaya lang wala yan sa Code of
Commerce. Then later, e-mail address. Tapos ngayon baka meron pang Facebook,
meron pang Twitter, may Instagram. Kaya iyong mga iyon ay idinagdag kasi as matter
of convenience na lang. Dati kasi ang requirement, complete name, complete address.
Iyon lang. Maliwanag?
Ngayon, under sa Code of Commerce, bills of lading should be printed. Carriers, when
they cause the printing of their bills of lading, they also cause the printing of
provisions to limit their liability in case of loss or damage to shipper’s the
goods. Kasi katwiran ng mga carrier eh na magpapa-print na lang ako with a little cost
na idadagdag sa pagpapaprint. Kaya ginawa ng mga common carriers doon sa mga bills
of lading, pinalagay na in case of loss or damage in the shipment, the liablity of the
carrier is limited only to so much. Kaya ang tanong, are those stipulations binding to the
shipper although bills of lading are signed only by the carrier’s representative?
The Supreme Court said yes. Ang tawag natin doon, contracts of adhesion.
Kaya lang, there is no prohibition against contracts of adhesion. The only rule against
contracts of adhesion is that if there be any ambiguity, the ambiguity shall be resolved
against the one who caused it. Kaya binding yung printed stipulations kasi sabi ng
Supreme Court, contracts are perfected by mere consent and consent can be implied.
Kung ikaw yang shipper, nabasa mo, di ka nagreklamo or di ka nag-react, considered

impliedly accepted. You are bound. You are bound by the predetermined stipulations.
Alright, yang salitang bill of lading, originally ang tawag ay Documents of Title
transporting goods by water. Mass transportation is through vessels, mga galleons.
Nagkaroon ng trucks, motor vehicles by land. Truckers issued WAYBILLS. Later, in
transporting goods - they issue Inway Bills. Kaya ang waybills and inway bills are same
genus as bills of lading.
THREE-FOLD PURPOSES OF A BILL OF LADING
1. IT SERVES AS A RECEIPT
2. IT SERVES AS A WRITTEN CONTRACT BETWEEN THE PARTIES
3. IT STANDS FOR THE GOODS MENTIONED THEREIN

Bakit ganon? Kasi paghawak mo yung papel, yung bill of lading, para bang hawak mo na
din yung goods covered by it. It stands for the goods mentioned by it.
Another instance is, kung iyan ay negotiable, pagnanegotiate mo, kahit yung goods nasa
bodega pa or barko, parang naitransfer mo na rin yung ownership of the goods.
O question, if a common carrier would issue a bill of lading, shall it give rise to a
conclusive presumption that the goods were received by the carrier? Answer is NO.
When a common carrier issues a bill of lading, it is a DISPUTABLE
PRESUMPTION that the goods were received. Not conclusive. It is merely
disputable.
GENERAL BONDED WAREHOUSE ACT
Who is to issue warehouse receipts? Edi warehouseman.
What law governs the business of warehousing? Wag mo sabihing Warehouse Reciepts
Act. Pang warehouse receipts lang yun.
The law governing the business of warehousing is the GENERAL BONDED

WAREHOUSE ACT. In effect pa yang batas na yan. Importante yan kapag abogado ka
tapos it happened that your very first client wants to enter into a business of
warehousing. Kailangan basahin mo yung General Bonded Warehouse Act.
Anong requirements if you are engaged in warehousing?
Kung meron ka ng warehouse, (1) you apply for a license with the DTI and then (2)
you will be asked to post a bond. As a condition for the issuance of a license, the
applicant should be required to post a bond. Ang tanong, what is the bond for? The
purpose of the bond is to answer for any damage the goods might suffer while
in storage. Ang bodega pwedeng masunog, pwedeng bahain. Paano naman yung mga
nasirang goods while in storage? The bond shall answer for the damages. The term of
the license, kung magpapalisensya ka, yung lisensya expires at the end of the year.
Magpaparenew ka but as a condition for the renewal, you again post a bond.
Under the General Bonded Warehouse Act, the warehouseman is obliged to insure
against fire all goods stored in the warehouse.
WAREHOUSE RECEIPTS ACT
Under Warehouse receipts Act, if a warehouseman will issue more than one copy of a
negotiable warehouse receipt, all the copies issued indicate that they are merely copies
or that they are not the original.
Ako yung warehouseman. Kayo ang aking depositors. When I prepared my warehouse
receipts, dapat at least dalawang kopya. Isang original para sa depositor, yung second
copy for my files. Merchant ako, kumikita ako, in short, I need to comply with other laws
like that of the BIR na kailangan my bookkeeping kaya dapat I also keep copy of the
receipts. Si customer also needs a copy for recording transactions.
You came over, sabi mo, “Meron akong idedeposito sa bodega. I have a shipment of
20,000 crates of fresh apples. I need to store them in your refrigerated warehouse.”
Sabi mo walang problema. Kaya lang sabi mo sa akin “May conditions ako. Number one,
lahat ng warehouse receipt na iissue mo for my apples, issue mo lahat ‘deliver to

bearer.’” The reason that you requested that is kasi ikaw, inimport mo yung fresh apples
and binebenta mo sa customers mo. And you know the habits of your customers.
Customer A, kung umorder madalas 300, Customer B kadalasan 250, Customer C
kadalasan 200, and so on. Ang plano mo, kapag bumebenta ka, sasabihin mo sa buyer
mo na siya na ang kumuha at your convenience. Your buyer may want it that way.
In short, for the convenience of the parties, ayun, umorder ka, ayan, 300, ikaw ang
kumuha at your convenience. Okay? All right.
So, eto naman. Obligero, ikaw yung depositor. Ngayon, kung ibibigay mo sa buyer mo
yung original, ano naman ang gagamitin mo for recording purposes? And, you also have
to record your transactions following the BIR, the Internal Revenue Code.
Of course, sasabihin mo ipa-xerox mo. Hindi na. Hindi pwedeng gamitin ang xerox for
recording purposes. Kaya ang sabi ni depositor, “Boss, lahat ng warehouse receipt,
‘deliver to bearer’, ha.” Second, “Bigyan mo ako ng extra copy.” All right. Ngayon, extra
copy, sabi “No problem!”
Kaya lang kagaya niyan, “deliver to bearer”, negotiable ‘yan.
All right. Ngayon, How do you do several documents simultaneously?
‘Pag gagawa ka ng dokumento, ha, making copies at the same time, anong ginagawa
mo?
Eh, di gagamit ka ng carbon paper. Oh, ngayon, pwedeng typewriter ‘yan. Pwede ring
printer… Epson dot matrix. Oh, di ba? Yan din and ginagamit ng mga merchants, ha,
yung maingay.
All right. Ngayon, e di, naiprint na. All right. So, kunwari, five copies. Siyempre,
kinakailangang pirmahan mo yung first copy. Ibigay mo ron sa customer. Kaya lang,
halimbawa, ha, tinamad ka ng tanggalin yang carbon. You see a ballpen. You sign
heavily on the first copy. In short, your signature also appears on the second and other
copies. Ngayon, young second and other copies mo, may pirma mo ‘yun. So, they are as
good as the original.
Di ba? If you remember your law on evidence, mayroon ding tinatawag na duplicate
original. At, merong sinasabing carbon original.
And, ‘pag pinag-usapan ang probative value, they are as good as the very first copy na
pirmado.
Oh, ngayon, ha, sabi ng customer, “I want an extra copy.” All right. Eh, sinabi niya,
“deliver to bearer”, so negotiable ‘yan and he wants an extra copy. Maglalabas ka ng
extra at ikaw and pipirma, delikado ‘yan. Kasi, lumalabas ‘yan, not original.
Kaya ang puwedeng mangyari, as always, baka yung first copy na hindi na-save sa isa.
Yung second copy na pirmado, which as good as the original, siya naman ang ma-
negotiate.
So, two notice, the same document were negotiated to different persons and in good
faith and for value. Kaya disgrasya si warehouseman.
Why? Eh, kung may isa mag-claim, eh, ibibigay mo yung goods. Yung isa dumating rin.
Oh. Kaya under the law, if a warehouseman would issue more than one copy of a
negotiable warehouse receipt, all the copy, or copies, they should indicate that they are
not original or that they are merely copies.
So, ang tanong, paano ginagawa? Well, simple. There are different ways of doing it. One
way is ipapa-print mo, halimbawa, kung boat number, limang kopya. All right. ‘Yung first
copy, everybody knows that it is the original. Yung second copy, pa-print mo na doon,
duplicate. Yung pangatlo, triplicate. Hmm… Yung pang-apat, quadruplicate. Yung pang-
lima, fifthlicate. Ayun. At least, malalaman mo. “Hindi para ito original.” “Duplicate lang
para ito.” Oh, “Ito, triplicate lang para kahit pirmado.”
Eh, di, di na papatulan ‘yun kasi nakita niya, “di pala ito original.”
All right. The other way is, mahal ‘yun, magpapa-print ka ng may duplicate, triplicate,
quadruplicate. Ang ginagawa ng mga negosyante, original, yung mga susunod, second,
third, fourth copy, pa-print na, “C-O-P-Y”, which means copy. Ibig sabihin, hindi original.
Kaya kung ‘yun ang inenegotiate sa iyo, “copy”, huwag mo nang papatulan ‘yun because
that’s not the original, that is just a copy and if you will just give a copy, you have no
right. Malinaw? Malinaw, ha?
So again, under the Warehouse Receipts Act, if the warehouse man produces
more than one copy of a negotiable warehouse receipt, all the copy, or copies,
they should indicate that they are mere copies or that they are not the original.
And, if the warehouseman will fail to do that, and copy of copies will fall into
the hands of somebody who paid value for it and who acted in good faith, the
warehouseman shall be liable to said person as if he were holding the original.
Hmm…malinaw? Oh, question? Ah…what is the effect of negotiation?
What is the effect of negotiation of a warehouse receipt? All right.
The law says that, through negotiation, the transferee acquires the direct
obligation of the warehouseman to deliver the goods to him.
Okay. Ganito ‘yun. Ako ang warehouseman. Ang depositor ko si Pedro. At si Pedro, I
issued a negotiable receipt over certain goods. And ginawa ni Pedro, binenta niya ‘yung
goods. So, ang ginawa niya, yung sa buyer, naibenta niya kung warehouse receipt. Oh,
maaring with endorsement, with delivery.
‘Yan. Kaya ang buyer ni Pedro si Maria. And, I am seeing Maria for the first time in my
life. Kasi, binenta ni Pedro kay Maria. Ang alam kong depositor ay si Pedro. Kaya ang
nag-claim ngayon ay is Maria.
All right. So, when Maria came over, I was seeing Maria for the first time in my life, ang
tanning ko sa kanya, “Ma’am, have we met before?” Sabi ni Maria, “Ay, hindi ho ngayon
lang aka nagpunta rito.”
When I heard that answer, sabi ko, “Ma’am, teka lang po ha kasi, alam niyo, kabilin-
bilinan ng nanay ko, ‘Don’t talk to strangers’.” Pwede ko bang i-snob-in si Maria? Hindi.
Kasi nga, through negotiation, the transferee acquires the direct obligation of the
warehouseman to deliver the goods to him. Kaya di ko pwedeng tanggihan si Maria.
Kinakailangang kausapin ko siya kasi she has the right over the goods.
Kaya lang, question, What are the requirements before a warehouseman should
be obliged to deliver the goods to the claimant?
Under the law, to entitle the claimant to get the goods from the warehouseman,
three requirements:
One, person claiming the goods must first satisfy all the liens of the
warehouseman.
Again, the person claiming the goods must first satisfy all the liens of the
warehouseman.
So, ‘yun na. Liens. L-I-E-N-S. Liens. Yung iba kasi ang pronunciation: li-yen. Hindi. The
correct pronunciation is Lien. Parang merchant’s lien, possessory lien. Malinaw?
So, the claimant must first satisfy all the liens of the warehouseman. Eh, ang tanong,
“Ano kung liens of a warehouseman?”
Kung ikaw ang warehouseman, ano ang kapagkikitan? Eh di, siyempre storage fees.
Kaya may storage fee prepaid, data bayaran muna ‘yun before.. (interrupted by the
commencement of the Angelus). Sige to be continued…
(After the Angelus)
All right. So yun ang una sa liens, yung storage fees. Ngayon, there are still other
liens, like, halimbawa, sari nung depositor, “Yung shipment ko ngayon, mamahalin yan.
Puwede bang ikuha mo ng additional insurance coverage?” All right. Ang sabi ko,
“Walang problema. Kailan magbayad ng premium.” Sabi, “Paki-advance muna.” Sabi ko,
“Walang problema. Kaya lang, company policy eh. Kapag mag-advance kami ng kahit
anong halaga, may interest at 2% per month.” Ang sabi ng depositor, “Oh, sige.” Oh,
pirma. ‘Yan. So yung premiums, insurance coverage, plus interest will also form
part of the liens of the warehouseman.
Pwede rin. All right. So, ganito ha. Yung mga tinatawag na public warehouses, they are
very big structures. Hindi lang, ano lang ‘yan, di lang one storey. Yung mga malalaki
talaga diyan, multi-storey na. So, when goods come in, siyempre dapat kapag dumating
yung shipment, naka container ‘yan, bubuksan. ‘Pag binuksan mo yung metal container,
makikita mo yung goods, they are placed on top of each other. Ang gagawin diyan,
kukunin ‘yan ng forklift. Ang gagawin ng forklift, tatanggalin sa container, ipapasok doon
sa industrial elevator to be brought to an upper floor. Tapos, doon na naka-stock.
All right. Ngayon. ‘Yang mga bodega, marami ‘yan. And, shipments would come in bulk
containers. Halimbawa, kunwari yung depositor, ang negosyo niya ay importation of
spices. And, what arrived today are crates, ganito kalaki, full of peppercorns…pamintang
bilog. Oh, ngayon. Yung paminta natin na ginagamit natin sa adobo, o kaya sa paksiw.
Okay? Ayun. Yung peppercorns.
All right. So, sabi, “Boss, ito yung peppercorns, pwede bang makiusap sa iyo? Kasi, itong
mga peppercorns na ito ibebenta ko sa retailer, sa palengke.” Ayan yung nagbebenta ng
naka-sachet. All right. ‘Pag binebenta ito sa mga ‘yun, eh, dapat naka-sachet na. Kaya
ang arrangement sa akin, “Pwede ba, habang nandiyan, can you have them repacked?”
Ako naman ang bibili ng sachet at hahanap ng tao na maglalagay ng paminta sa baat
sachet. Tig sasampung piraso ‘yan. Kasi, ang retailer, di ba, ayun. Basta tulungan mong
magbenta. “Basta ibili mo ako ng sealer, ha.” Kasi, bawal na ang stapler.
Sabi ko “Walang problema”. O ngayon may gastos yan. Sabi ko bayaran mo ako dyan,
ganito ang rate ko dyan. Lahat yan iaadvance ng warehouseman kaya will form part of
his liens. Kaya whoever will claim the goods will have to satisfy the liens of the
warehouseman. Kung ako bodegero, di ko bibigay sa iyo yon kase mamamomoblema
akong maghabol sa iyo. Kaya better bayaran mo muna ako before I give the goods to
you.
Second, the person claiming the goods must surrender the original warehouse receipt.
Kaya ang tanong what if the original got lost? Kaya ang tanong, what if the original got
lost? A big problem will be on the part of the claimant. He will have to go to court,
establish his rights and when the court is convinced, the court will issue an order
directing the warehouseman to deliver even without the original. Yun nga lang the court
will have to secure the warehouseman. The court will direct the claimant to post a bond
for the value of the goods covered by the lost warehouse receipt. The purpose of the
bond is to answer for any damage that the warehouseman might suffer when later
somebody comes around with the original. Kase kung sino man ang may hawak nung
original, will have the right over the goods. Kaya kung ako ang inutusan ng court, e
kung may dumating, dala dala ang origina, wala na akong ibibigay. Kaya ang
mangyayare, the bond shall answer for the claim of the person in possession of the
warehouse receipt.
Third, the person claiming the goods must express willingness to sign a receipt upon
delivery of the goods to him. Maliwanag?
Fourth, the warehouseman upon getting back the original warehouse receipt should
cancel it and if he won’t, and such receipt falls into the hands of somebody who
happened to be a buyer in good faith and paid for it, the warehouseman is liable. Kaya
kung titingnan, napakaimportante ng mga documents of title. Warehouse receipts shall
not be taken lightly. They are not like ordinary sheet of paper kase sila ay documents of
title at ang masama ay negotiable pa. Alright.

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B A N K I N G – A B E L L A N O T E S 4 F 2 0 1 7 - 2 0 1 8 |1

NEW CENTRAL BANK ACT

BRIEF HISTORY: BANGKO SENTRAL NG PILIPINAS

Oh ngayon, BSP has a corporate existence so as it is a corporation, uh, it is managed by

FUNCTIONS OF THE BSP

Oh question: what are the functions of the BSP?

Another is management of money supply.

Another is supervision of the banking system.

Another function: Purchase of precious metal. Trading of precious metals.

Let's talk about very basic matters.

What is your understanding of money? Sino ang graduate ng business? Accounting,

Sabi ng Central Bank, certain conditions must be met.

Another requirement, there must still be at least 1 set of serial numbers.

Another, there must still be one signature.

And one more, no sign of intentional defacement.

Requirements of acceptability of damaged coin for replacement or deposit. (1.) no sign

WHEN IS REPLACEMENT OF DAMAGED NOTES POSSIBLE:

1) At least three-fifths (3/5) of the note must still be there;

3) One signature; and

For coins: No sign of filing, clipping, or perforation.

Ganito, mayroong accounting. Accounting is simply recording. Ngayon sa accounting

What are the 3 purposes of reserve Requirements?

If you do not follow the rules of central bank, there is penalty.

BANK SECRECY LAW

Ayan, BIR ko-kolekta.

Yung nakapansin sa iyo, pumasok sa bangok at tinanong yung bank teller:

“Ma’am , yung kalalabas lang. Napansin mo madalas nagde-deposito dito”.

“Magkano na deposit niya?”, follow up question ‘yan nung nagtanong.

‘Yun palang nagtatanong: KIDNAPPER! Yung depositor: nakidnap. Ransom demanded:

Sasabihin nung nakidnap: “Wala akong perang ganoong kalaki”

E walang secrecy law.

E UNKNOWN TO YOU: bago pala nagtanong kumadre mo, nagtanong na sa bangko

“Dadalhin ko bukas”, Sagot sayo

In short: You lost your money, and you lost a friend.

O ganito: I am a husband. I am providing for OLD AGE. Ayoko maging dependent sa

In short: he appeased the wife: “Ano pong maitutulong ko sa inyo?”

“Gusto ko lang po malaman yung deposito ng asawa ko dito”

E walang secrecy law.

“O sige ma’am, sandal lang. Bigyan ko kayo ng print-out.”

2. In case of impeachment. So based on your recollection, how many impeachment

FOREIGN INVESTMENTS ACT

1. A foreigner may own 100% of an enterprise… Kapag sinabing enterprise, business

Oh ngayon, another rule under the Foreign Investment Act.

First, a foreigner cannot engage is reserved to Filipinos by the constitution

So next comes beer houses. So question. Kasama ba restaurants? Di kasama

O ngayon other rules on foreign investments.

A. A foreigner who may not be able to make an inward remittance of at least

B. And must hire on a regular basis no less than 50 Filipino workers

So in short tuwang tuwa ka, nakabili ka agad, hindi mo na pinakawalan yung

O yan ang Foreign Investments Act. Any questions?

GENERAL BANKING LAW OF 2000

How are banks classified? Based/ according on the amount of capitalization.

COMMERCIAL BANK, stated in the definition of universal bank—that it is a

Another function that’s inherent to a commercial bank is yung opening ng

Another business of an investment house is the underwriting of securities. What is your

So in short malungkot si Mr. Cruz

***(continuation… February 12 meeting)

Ngayon, ano ba yung rediscounting of receivables? Alright, ganito ha, I already