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Banking on lawyers for lawyers in banking

(Article published in the Jul 28, 2010 issue of Manila Standard Today)   

Launched Tuesday this week (27 July 2010), The New Central Bank Act Annotated is a first in at least three ways.  First, it is, as the Foreword by Bangko Sentral’s Governor Amando M. Tetangco, Jr. states, is the first of a series of books in banking laws to be published by the Bangko Sentral.  Hence, the “Book I” in full title “Banking Laws of the Philippines, Book I, The New Central Bank Act Annotated.”  Book II, I assume, would deal with the General Banking Law.

Second, it is, to my knowledge, the first and only authoritative and exhaustive (though certainly not exhausting, when consulted properly) work on Republic Act No. 7653. That law created the Bangko Sentral ng Pilipinas to replace the old Central Bank of the Philippines that was established under R.A. No. 265.  As every one who willingly admits to being old enough to have been alive around the time of the establishment of the old central bank in 1948 knows, R.A. No. 265 radically transformed the economy with the severance of the seat of monetary policy from the fiscal exigencies of the government.  Yet, despite that major significance, no single legal tome was produced for more than half a century, if only to at least compile, if not to analyze and harmonize, its legal and regulatory progeny.

 But what to me is the third and very significant first for The New Central Bank Act Annotated is the fact that not until now did we have a piece of legal work that was the joint and community accomplishment by the very people who through the years were themselves the ones deeply involved in shaping and enforcing the precepts and principles they articulate in their opus. 
 










     

 “The annotations contained in this book,” writes BSP Assistant Governor and General Counsel, Juan De Zuñiga, Jr. who is the Executive Editor of the Editorial Board, “were written by lawyers of the Office of the General Counsel and Legal Services of the Bangko Sentral ng Pilipinas. Research and writing of the annotations were accomplished by individual authors and then subjected to rigorous review and discussion by the Editorial Board. Each paragraph, including writing style, reliability of sources and citations, was subjected to detailed scrutiny and debate by lawyers of varying specializations and level of expertise in banking and other related fields of law.  In the course of writing, consultations were constantly sought from different departments and offices of the Bangko Sentral tasked to implement the legal provisions.”  It is thus the BSP legal community talking about the legal face of BSP, not much different from the Holy Writ which in a sense, is really a record of a believing community’s remembrance of how they all began.

 To reduce, if not to eliminate, the likelihood of the usual dissonance that results when several lawyers discuss a common subject, the Editorial Board organized the material in a stylized fashion.  The sections of R.A. No. 7653, after the introductory chapter that dealt with the history of central banking in the Philippines, were discussed in seriatim, i.e. in the sequence that they come in the law.  Thereafter, each section was annotated in exactly the same fashion.  First came the legislative history of the provision, specifically indicating whether it is a new one or derived from previous law, and if the latter, how it is different from the original provision in R.A. No. 265. Then follows, where the section is in direct response to a Constitutional mandate, the statement of the Constitutional provision; and finally comes an exposition of what each significant specific word or phrase, both in the light of decided cases (the more significant of which are provided in digest) and other interpretative sources.

 An important, and up until now unavailable to the general public, reference resource are the Opinions of the General Counsel.  These opinions constitute the contemporary interpretation of the implementers of the law and are thus expositive of how the regulators understood the specific provision of law being discussed.  Even the courts give this mode of statutory construction great weight, particularly when issued by an agency with special expertise not shared by all, even by those within the legal community.

 The value of such stylized presentation is clearly demonstrated by the treatment of probably the most significant, for banks and bankers, provision, namely Section 30 on Proceedings in Receivership and Liquidation.  The legislative history relates the three ways it is a modification of Sec. 29 of R.A. No. 265. Then it delves into the tests that the Monetary Board may use to determine whether is a bank is suffering from “insolvency” and goes into its privileged power, justified by the Monetary Board’s function in the economy, to “close now, hear later”.  This is followed by the procedure of placing a bank under receivership and, if warranted, liquidation, and finally the role of courts.  Reading the annotations on Section 30 cannot but remind me of the times, over the years, I had been in some instances defending its exercise and in others seeking to mitigate the economic and traumatic impact of its exercise on my clients.

 In the annotations on Sec. 30, and in many others as well, one discerns the very palpable struggle on the part of the Editorial Board to state the material as objectively as possible, sans the more usual zealous and advocative spin that is natural to lawyers.  As professionals trained in school and commissioned at work to take sides, it is almost instinct for them to espouse a position.  This studied objectivity of a scholarly work the authors very studiously and, in my view, successfully achieved in the fashion and tradition of Corpus Juris Secondum, of American Jurisprudence, and of similar legal encyclopedias.  And that just might be The New Central Bank Act Annotated’s fourth first.

     

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