PRESIDENTIAL DECREE No.

763 August 6, 1975

AMENDING SECTION 121 OF COMMONWEALTH ACT NO. 141, AS
AMENDED, OTHERWISE KNOWN AS THE PUBLIC LAND ACT, TO ALLOW
QUALIFIED JURIDICAL ENTITIES TO ACQUIRE LANDS ORIGINALLY
GRANTED UNDER THE FREE PATENT, HOMESTEAD OR INDIVIDUAL
SALE PROVISIONS OF SAID ACT, FOR COMMERCIAL AND INDUSTRIAL
PURPOSES
WHEREAS, the provisions of Section 121 of Commonwealth Act No. 141, as
amended by Commonwealth Act No. 615, limit the right of corporations,
partnerships or associations to acquire or have any right to lands originally
granted under the free patent, homestead or individual sale provisions of the
said Act, only for educational, charitable, religious or right of way purposes;
WHEREAS, such restriction has been an obstacle to the efforts of the private
sector to accelerate economic development;
WHEREAS, it is necessary in the national interest to remove restriction
imposed by Commonwealth Act No. 615 on the right of judicial entities to
acquire such lands for commercial or industrial purposes.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by
virtue of the powers vested in me by the Constitution of the Philippines, do
hereby decree as follows:
Section 1. Section 121 of Commonwealth Act No. 141, as amended, is
hereby further amended to read as follows:
"Sec. 121. Except with the consent of the grantee and the approval of the
Secretary of Natural Resources, and solely for commercial, industrial,
educational, religious, or charitable purposes or for a right of way, no
corporation, association, or partnership may acquire or have any right, title,
interest, or property right whatsoever to any land granted under the free
patent, homestead, or individual sale provisions of this Act or to any
permanent improvement on such land.
"The provisions of Section 124 of this Act to the contrary notwithstanding,
any acquisition of such land, rights thereto or improvements thereon by a
corporation association, or partnership prior to the promulgation of this
Decree for the purposes herein stated is deemed valid and binding; Provided,

That no final decision or reversion of such land to the State has been
rendered by a court; And Provided, further, That such acquisition is approved
by the Secretary of Natural Resources within six (6) months from the
effectivity of this Decree."
Section 2. This Decree shall take effect immediately.
Done in the City of Manila, this 6th day of August, in the year of Our Lord,
nineteen hundred and seventy-five.

AMENDING CERTAIN SECTIONS OF REPUBLIC ACT NUMBERED SEVEN

HUNDRED TWENTY, OTHERWISE KNOWN AS THE RURAL BANKS
ACT
WHEREAS, there were pending before Congress prior to the promulgation of
Proclamation No. 1081, dated September 21, 1972, urgent banking measures
proposing amendments to Republic Act No. 720, as amended, entitled The
Rural Banks Act which are essential to the national development program
of the Government;
WHEREAS, an extensive survey and study of the banking and credit system
had been undertaken for the purposes of assessing its adequacy in Philippine
economic growth, and of facilitating the savings-investment process in
development;
WHEREAS, the result of the survey was an integrated set of
recommendations which were accepted, with modifications by the monetary
authorities, and made the basis of this Decree to enable rural banks to
service the credit needs of small farmers and merchants in rural
communities more effectively;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by
virtue of the powers vested in me by the Constitution as Commander-in-Chief
of all the Armed Forces of the Philippines, and pursuant to Proclamation No.

1081, dated September 21, 1972, and General Order No. 1, dated September
22, 1972, as amended, and in order to effect the desired changes and
reforms in the social, economic, and political structure of our society, do
hereby order and decree the amendment of Republic Act No. 720, as
amended, as follows:
Section 1. Section four of Republic Act Numbered Seven hundred twenty is
hereby amended to read as follows:
Sec. 4. No Rural Bank shall be operated without a Certificate of Authority of
the Monetary Board of the Central Bank. Rural Banks shall be organized in
the form of stock corporations. Duly established cooperatives and
corporations primarily organized to hold equities in Rural Banks within a
defined region, provided any such corporation is at least partly owned by
residents of that particular region, may organize a Rural Bank and/or
subscribe to the shares of stock of any Rural Bank. With the prior approval of
the Monetary Board, the extent of the equity investment in any Rural Bank of
corporations contemplated under this section shall not be subject to any
limitation, the provisions of existing laws to the contrary, notwithstanding.
One hundred per cent of the capital stock of any Rural Bank shall be owned
and held directly or indirectly by citizens of the Philippines: Provided,
however, That if said subscription of private shareholders, to the capital
stock of a Rural Bank cannot be secured or is not available, the Development
Bank of the Philippines, on representation of the said private shareholders,
and upon approval of the Monetary Board of the Central Bank, shall
subscribe to the capital stock of such Rural Bank, which shall be paid in full
at the time of subscription, in an amount equal to the fully paid subscribed
capital of the private shareholders, but not exceeding one million pesos:
Provided, further, That such shares of stock subscribed by the Development
Bank of the Philippines may be sold at any time at par to private individuals
who are citizens of the Philippines: Provided, finally, That in the sale of
shares of stock subscribed by the Development Bank of the Philippines, the
registered stockholders shall have the right of pre-emption within one year
from the date of offer in proportion to their respective holdings, but in the
absence of such buyer, preference, however, shall be given to residents of
the locality or province where the Rural Bank is located. All members of the
Board of Directors of the Rural Bank shall be citizens of the Philippines;
Provided, however, That no full-time appointive or elective public official shall
at the same time serve as officer, director, legal counsel or consultant of any
Rural Bank except in cases where such service is incident to financial

assistance provided by the Government or a government-owned or

controlled corporation to the bank.
Section 2. Section five of the same Act is hereby amended to read as
follows:
Sec. 5. Loans or advances extended by Rural Banks, organized and
operated under this Act, shall be primarily for the purpose of meeting the
normal credit needs of any small farmer or farm family owing or cultivating,
in the aggregate, not more than fifty hectares of land dedicated to
agricultural production as well as the normal credit needs of cooperatives
and small merchants. For the purposes of this Act, a small merchant shall be
one whose capital investment does not exceed fifty thousand pesos. In the
granting of loans, the Rural Bank shall give preference to the application of
farmers and merchants whose cash requirements are small.
Loans may be granted by Rural Banks on the security of lands without
Torrens titles where the owner of private property can show five years or
more of peaceful, continuous and uninterrupted possession in the concept of
an owner; or of portions of friar land estates or other lands administered by
the Bureau of Lands that are covered by sales contracts and purchasers have
paid at least five years installment thereon, without the necessity of prior
approval and consent by the Director of Lands; or of portions of other estates
under the administration of the Land Authority or other governmental
agency which are likewise covered by sales contracts and the purchasers
have paid at least five (5) years installment thereon, without the necessity of
prior approval and consent of the Land Authority or corresponding
governmental agency; or of homesteads or free patent lands pending the
issuance of titles but already approved, the provisions of any law or
regulations to the contrary notwithstanding: Provided, That when the
corresponding titles are issued the same shall be delivered to the register of
deeds of the province where such lands are situated for the annotation of the
encumbrance: Provided, further, That in the case of lands pending
homestead or free patent titles, copies of notices for the presentation of the
final proof shall also be furnished the creditor rural bank and, if the borrower
applicants fail to present the final proof within thirty (30) days from date of
notice, the creditor rural bank may do so for them at their expense: Provided,
furthermore, That the applicant for homestead or free patent has already
made improvements on the land and the loan applied for is to be used for
further development of the same or for other productive economic activities:

Provided, finally, That the appraisal and verification of the status of a land is
the full responsibility of the rural bank and any loan granted on any land
which shall be found later to be within the forest zone shall be for the sole
account of the rural bank to the exclusion of the Central Bank counterpart.
The foreclosure of mortgages covering loans granted by rural banks shall be
exempt from the publication in newspapers now required by law where the
total amount of loan, including interests due and unpaid, does not exceed
three thousand pesos (P3,000.00). It shall be sufficient publication in such
cases if the notices of foreclosures are posted in at least three of the most
conspicuous public places in the municipality and barrio where the land
mortgaged is situated during the period of sixty days immediately preceding
the public auction. Proof of publication as required herein shall be
accomplished by affidavit of the sheriff or officer conducting the foreclosure
sale and shall be attached with the records of the case: Provided, That when
a homestead or free patent land is foreclosed, the homesteader or free
patent holder, as well as their heirs shall have the right to redeem the same
within two years from the date of foreclosure in case of a land not covered by
a Torrens title or two years from the date of the registration of the foreclosure
in the case of a land covered by a Torrens title: Provided, finally, That in case
of borrowers who are mere tenants the produce corresponding to their share
may be accepted as security.
Section 3. Section six of the same Act is hereby amended to read as
follows:
Sec. 6. With the view to insuring balanced rural economic growth and
expansion, Rural Banks may, within limits and conditions fixed by the
Monetary Board, devote a portion of their loanable funds to meeting the
normal credit needs of small business enterprises whose capital investment
does not exceed fifty thousand pesos and of essential rural enterprises or
industries, other than those which are strictly agricultural in nature.
Section 4. Section seven of the same act is hereby amended to read as
follows:
Sec. 7. To provide supplemental capital to any Rural Bank until it has
accumulated enough capital of its own or stimulate private investments in
Rural Banks, the Development Bank of the Philippines shall, upon
certification of the Monetary Board which shall be final, of the existence of
such need, subscribe within thirty days to capital stock of any Rural Bank

from time to time in an amount equal to the equity investment of the private
shareholders which shall be paid in full at the time of subscription but not
exceeding one million pesos: Provided, however, That shares of stock issued
to the Development Bank of the Philippines, pursuant to this section, may, at
any time, be paid off at par and retired in whole or in part if, in the opinion of
the Monetary Board, the Rural Bank has accumulated enough capital
strength to permit retirement of such shares; or if an offer is received from
private sources, to replace the equity investments of the Development Bank
of the Philippines with an equivalent investment or more in the common
stock of such Bank. In case of such retirement of stock or replacement of
equity investments of the Development Bank of the Philippines, the
registered private shareholders of the Rural Bank shall have the right of preemption within one year from date of offer in proportion of their respective
holdings.
Stock held by the Development Bank of the Philippines, under the terms of
this section, shall be made preferred only as to assets upon liquidation and
without the power to vote and shall share in dividend distributions not
exceeding two per cent thereof without preference: Provided, however, That
if such stock of the Development Bank of the Philippines is sold to private
shareholders, the same shall be converted into common stock of the class
provided for in section nine.
Section 5. Section ten of the same Act is hereby amended to read as
follows:
Sec. 10. The power to supervise the operation of any Rural Bank by the
Monetary Board of the Central Bank as herein indicated, shall consist in
placing limits to the maximum credit allowed any individual borrower; in
prescribing the interest rate; in determining the loan period and loan
procedures; in indicating the manner in which technical assistance shall be
extended to Rural Banks; in imposing a uniform accounting system and
manner of keeping the accounts and records of the Rural Banks; in
undertaking regular credit examination of the Rural Banks; in instituting
periodic surveys of loan and lending procedures, audits, test-check of cash
and other transactions of Rural Banks; in conducting training courses for
personnel of Rural Banks; and, in general, in supervising the business and
corporate operations of the Rural Banks.

The director of the Department of the Central bank designated by the

Monetary Board to supervise Rural Banks shall have the power to enforce the
laws, orders, instructions, rules and regulations promulgated by the
Monetary Board applicable to Rural Banks; to require Rural Banks, their
directors, officers and agents to conduct and manage the affairs of the Rural
Bank in a lawful and orderly manner; and, upon proof that the Rural Bank or
its board of directors or officers are conducting and managing the affairs of
the bank in a manner contrary to laws, orders, instructions, rules and
regulations promulgated by the Monetary Board or in a manner substantially
prejudicial to the interests of the government, depositors or creditors, to take
over the management of such bank when specifically authorized to do so by
the Monetary Board after due hearing until a new board of directors and
officers are elected and qualified without prejudice to the prosecution of the
persons responsible for such violations under the provisions of sections
thirty-two, thirty-three and thirty-four of Republic Act Numbered sixty-five, as
amended, (The Central Bank Act).
The management of the Rural Bank by the Central Bank shall be without
expense to the Rural Bank, except such as is actually necessary for its
operation, pending the election and qualification of a new board of directors
and officers to take the place of those responsible for the violations or acts
contrary to the interests of the government, depositors or creditors.
The director and the examiners of the Department of the Central Bank
charged with the supervision of Rural Banks are hereby authorized to
administer oaths to any director, officer or employee of any Rural Bank or to
any voluntary witness and to compel the presentation of all books,
documents, papers or records necessary in his or their judgment to ascertain
the facts relative to the true condition of any Rural Bank or to any loan.
Section 6. A new section is hereby added after Section eleven of the same
Act to read as follows:
Sec. 11-A. Rural Banks may invest in equities of allied undertakings, except
banks, as may be approved by the Monetary Board: Provided, That (1) the
total investment in equities shall not exceed twenty-five per cent of the net
worth of the Rural Bank; (2) the equity investment in any single enterprise
shall be limited to fifteen per cent of the net worth of the Rural Bank, and (3)
the equity investment of the Rural Bank in any single enterprise shall remain
a minority holding in that enterprise except where the enterprise is not a

financial intermediary: Provided, further, That where such allied undertaking

is a wholly or majority-owned subsidiary of a Rural Bank, the same may be
subject to examination by the Central Bank: Provided, finally, That equity
investments shall not be permitted in non-related activities.
Section 7. Section thirteen of the same Act is hereby amended to read as
follows:
Sec. 13. In an emergency or when a financial crisis is imminents the Central
Bank may give a loan to any Rural Bank against assets of the Rural Bank
which may be considered acceptable by a concurrent vote of at least five
members of the Monetary Board.
In normal times, the Central Bank may rediscount against paper evidencing
a loan granted by a Rural Bank to any of its customers which can be liquefied
within a period of three hundred sixty days: Provided, however, That for the
purpose of implementing a nationwide program of agricultural and industrial
development, Rural Bank are hereby authorized, under such terms and
conditions as the Central Bank shall prescribe, to borrow, on a medium or
long-term basis, funds that the Central Bank or any other government
financing institution shall borrow from the International Bank for the
Reconstruction and Development or other international or foreign lending
institutions for the specific purpose of financing the above-stated agricultural
and industrial program. Repayment of loans obtained by the Central Bank of
the Philippines or any other government financing institutions from said
foreign lending institutions under this section shall be guaranteed by the
Republic of the Philippines.
Section 8. Section sixteen of the same Act is hereby amended to read as
follows:
Sec. 16. Any city or municipal judge in his capacity as notary public, exofficio shall administer the oath to or acknowledge the instruments of any
Rural Bank and its borrowers or mortgagors, free from all charges, fees and
documentary stamp tax, collectible under existing laws, relative to any loan
or transaction not exceeding five thousand pesos.
Section 9. Section seventeen of the same Act is hereby amended to read as
follows:

Sec. 17. Any register of deeds shall accept from any Rural Bank and its
borrowers or mortgagors for registration, free from all charges, fees, and
documentary stamp tax, collectible under existing laws, any instrument,
whether voluntary or involuntary, relating to loans or transactions extended
by a Rural Bank in an amount not exceeding five thousand pesos: Provided,
however, That charges, if any, shall only be collectible on the amount in
excess of five thousand pesos; and that in instruments related to
assignments of several mortgages consolidated in a single deed, charges or
fees, if any, shall be levied only on the amount in excess of five thousand
pesos of the consideration in the assignment of each mortgage.
Section 10. Section eighteen of the same Act is hereby amended to read as
follows:
Sec. 18. Any Rural Bank organized under this Act may, pursuant to
regulations promulgated for the purpose by the Monetary Board, be required
to contribute to the Central Bank an annual fee to help defray the cost of
maintaining the appropriate supervising department within the Central Bank
in an amount to be determined by the Monetary Board but in no case to
exceed one twentieth of one per cent (1/20 of 1%) of its average total assets
during the preceding year, as shown on its end-of-month balance sheets,
after deducting its cash on hand and amounts due from banks, including the
Central Bank.
Section 11. Section twenty-seven of the same Act is hereby amended to
read as follows:
Sec. 27. The provisions of Republic Act Numbered Two hundred and sixtyfive, as amended, and Three hundred thirty-seven, as amended, insofar as
they are applicable and not in conflict with any provision of this Act, are
hereby made a part of this Act.
Section 12. This Decree shall take effect immediately.

PRESIDENTIAL DECREE No. 124 February 2, 1973

DECLARING AN AMNESTY IN FAVOR OF ALL PERSONS WHO VIOLATED

THE CERTAIN PROVISIONS OF ANTI-SUBVERSION ACT.
WHEREAS, Proclamation no. 1081, dated September 21, 1972, declaring a
state of martial law throughout the land was issued because of widespread
lawlessness and anarchy, chaos and disorder, and wanton destruction of
lives and property prevailing throughout the country, perpetrated, among
others, by die-hard leaders and some members of activist groups, subversive
associations, and Communist-front organizations;
WHEREAS, surveys and assessments made by the military authorities as well
as reports from law-abiding and peace-loving sectors of our society indicate
that a number of members, followers and sympathizers, of said activist
groups, subversive associations and Communist-front organizations, are not
die-hard members or ideological believers in Communism but had been
drawn into these organizations, because of their association with, and/or as a
result of subtle indoctrination by hardcore activist leaders and false
propagandists;
WHEREAS, it is not unlikely that, in many instances, members or followers of
said groups have unwittingly allowed themselves to be identified with said
groups, associations or organizations;
WHEREAS, it has been the policy of the Government to deal and treat the
foregoing type of persons with companion so that they may be led back to
the folds of the law, and may thereby become our co-workers in the New
Society;
WHEREAS, to better realize the objectives of Proclamation No. 1081, general
orders, decrees and instructions issued pursuant thereto, and to hasten the

restoration of the tranquility and stability of the nation, and secure the
people from violence, injuries and loss of lives in the quickest possible
manner and time, it is necessary that certain members of said activist
groups, subversive associations and Communist-front organizations
especially the youth be allowed to lead normal lives under the control and
supervision of their parents, guardians, or benevolent citizens of their
respective communities;
NOW, THEREFORE, I, FERDINAND E. MARCOS, in my capacity as Commanderin-Chief of all the Armed Forces of the Philippines and pursuant to
Proclamation No. 1081, dated September 21, 1972, do hereby declare and
decree an amnesty in favor of all persons who may have violated the
following provisions of Section 4 of Republic Act No. 1700, to wit:
whoever knowingly, willfully, and by overt acts affiliates himself with,
becomes or remains a member of the Communist Party of the Philippines
and/or its successors or of any subversive association as defined in Section 2
hereof
I do hereby further declare and decree an amnesty in favor of all such
affiliates-members who may have committed any other offense penalized
under any law in furtherance of their political beliefs; Provided, however,
That this amnesty shall not apply to the following:
(a) such affiliate/member who has committed murder or crimes against
chastity or who have taken up arms against the government;
(b) those leaders of rebellion and sedition;
(c) officer or ranking leader of the Communist Party of the Philippines or of
any subversive association as defined in Section 2 of said Anti-Subversion
Act;
(d) one who conspires with any other person to overthrow the Government of
the Republic of the Philippines or the government of any of its political
subdivisions by force, violence, deceit, subversion or any other illegal means
for the purpose of placing such government or political subdivision under the
control and domination of any alien power:
Provided, further, That this decree shall cover only those who shall apply for
amnesty not later than March 15, 1973; Provided, furthermore, That said

applicant renounces in writing his affiliation/membership with said

subversive group or organization, surrenders whatever firearms and/or
explosives which he/she may have in his/her possession, licensed or
unlicensed, and pledges loyalty and obedience to the Government of the
Republic of the Philippines; And Provided, finally, That his or her parents,
known guardian or in the absence of the latter two, any prominent resident
of the community where he or she resides, shall likewise pledge in writing to
insure that the applicant shall be a peace-loving and law-abiding citizen of
the Philippine Republic at all times.
For the purposes of this Decree, subversive association, having the same
purpose as the Communist Party of the Philippines as the term is defined in
Section 2 of Republic Act No. 1700, is one organized to overthrow the
Government of the Republic of the Philippines for the purpose of establishing
in the Philippines a totalitarian regime and placing the government under the
control and domination of an alien power.
It is further decreed that in order to determine the persons who may be
granted amnesty, the Amnesty Commissions to be created by me shall
examine the facts and circumstances surrounding each case, conduct
summary hearings of witnesses, if necessary, and recommend to me
whether or not the persons concerned shall be granted amnesty: Provided,
That any person not expressly covered by this decree may nonetheless be
granted amnesty if so recommended as provided herein and the merits of
his/her case so warrant.
It is decreed finally that cases now pending before fiscals, civil courts, or
military tribunals against those who would be covered by this Decree shall be
dismissed motu proprio by the respective fiscals, civil courts or military
authorities/tribunals, or upon petition by the prosecution or the accused,
after the grant of amnesty by me as herein decreed.
Done in the City of Manila, this 2nd day of February, in the year of Our Lord,
nineteen hundred and seventy-three.