The New Central Bank Act

Section 42

The fiscal year of the Bangko Sentral shall begin on January first and end on December thirty-first of each year.

Section 43

Within the first sixty (60) days following the end of each year, the Bangko Sentral shall determine its net profits or losses. Notwithstanding any provision of law to the contrary, the net profit of the Bangko Sentral shall be determined after allowing for expenses of operation, adequate allowances and provisions for bad and doubtful debts, depreciation in assets, and such allowances and provisions for contingencies or other purposes as the Monetary Board may determine in accordance with prudent financial management and effective central banking operations. (as amended by RA No 11211) SECTION. 43-A. Bangko Sentral Reserve Fund. — The Bangko Sentral shall establish a reserve fund, whenever it has income or positive surplus, to mitigate future risks such as, but not limited to, the impacts of foreign exchange and price fluctuations, and to address other contingencies inherent in carrying out the Bangko Sentral-mandated functions as central monetary authority. The reserve fund shall consist of fluctuation reserve, contingency reserve and such other reserves as the Monetary Board deems prudent or necessary. (as inserted by RA No 11211)

Section 44

Within the first sixty (60) days following the end of each fiscal year, the Monetary Board shall determine and carry out the distribution of the net profits, in accordance with the following rule: Fifty percent (50%) of the net profits shall be carried to surplus and the remaining fifty percent (50%) shall revert back to the National Treasury, except as otherwise provided in the transitory provisions of this Act.

Section 45

Unrealized profits or losses arising from any revaluation of the Bangko Sentral’s assets, liabilities or derivative instruments denominated in foreign currencies with respect to the movements of prices and exchange rates from third currencies to Philippine peso shall not be included in the computation of the annual profits and losses of the Bangko Sentral. Any profits or losses arising in this manner shall be offset by any amounts which, as a consequence of such revaluations, are owed by the Philippines to any international or regional intergovernmental financial institution of which the Philippines is a member or are owed by these institutions to the Philippines. Any remaining unrealized profit or loss shall be carried in an account which shall be named ‘Revaluation of International Reserve (RIRY, and the net balance of which shall appear either among the liabilities or among the assets of the Bangko Sentral, depending on whether the revaluations have produced net profits or net losses. The RIR account shall be credited or debited for the periodic revaluation as authorized in this section and to reflect the corresponding adjustment resulting to reduction in the Bangko Sentral’s net foreign assets, liabilities and foreign currency-denominated derivative instruments. The RIR shall be adjusted and recognized in the income statement upon sale of gold and foreign securities, or when the foreign currency is repatriated to local currency or is used to pay foreign obligations, or upon maturity of a foreign currency-denominated forward or option contract involving the Philippine peso. (as amended by RA No 11211)

Section 46

Sections 43 and 43-A of Republic Act No. 265, as amended, creating the Monetary Adjustment Account (MAA) and the Exchange Stabilization Adjustment Account (ESAA), respectively, are hereby repealed. Amounts outstanding as of the effective date of this Act based on these accounts shall continue to be for the account of the Central Bank and shall be governed by the transitory provisions of this Act. The Revaluation of International Reserve (RIR) account as of the effective date of this Act of the Central Bank shall continue to be for the account of the same entity and shall be governed by the provisions of Section 44 of Republic Act No. 265, as amended, until otherwise provided for in accordance with the transitory provisions of this Act. The Auditor