December 11, 2015

BSP MEMORANDUM NO. M-2015-043

SUBJECT
:
Implementing Guidelines for the Consolidation
Program for Rural Banks (CPRB)
SECTION 11.0.

Approval of the Consolidation or Merger.

11.1 The Proponent Banks shall secure the approval of their

respective board of directors and shareholders on the final plan of
consolidation or merger.
11.2 Within sixty (60) days from receipt of the Financial Adviser's
Final Report, the Proponent Banks shall secure the regulatory
consents and/or approval of the PDIC, the BSP and the SEC as
provided under existing laws for all banks on consolidations or
mergers.
11.3 Upon BSP issuance of the Certificate of Authority to operate as
the Surviving Bank, the Proponent Banks shall secure from the SEC
the Certificate of Registration of the Surviving Bank.

July 10, 1980

CBP CIRCULAR NO. 740-80
CHAPTER III
Merger or Consolidation of Banks
SECTION 9. Participants in Merger or Consolidation. A rural bank
may merge with one or more rural banks for purposes of meeting the
paid-in capital requirement, increasing its resources, capital base, as
well as effectiveness in the operations of the resulting bank. The
merger or consolidation of two or more rural banks, or of one or
more rural banks with a thrift bank or a commercial bank as a means
of meeting the paid-in capital requirement for a thrift or commercial
bank or to enable it to perform expanded commercial banking
functions is hereby encouraged.
SECTION 10.
Requirement of Central Bank Approval. Bank
mergers and consolidations including the terms and conditions
thereof shall comply with the provisions of applicable law and are

subject to approval by the Central Bank, and merging/consolidating

banks should consult with the Central Bank before any
merger/consolidation agreement is finalized.
SECTION 11.
Rules on Exchange of Shares. As a general rule,
the ratio of exchange of shares between or among the participating
banks in a bank merger or consolidation should be based on mutual
agreement of the parties concerned. However, any appraisal surplus
arising from the revaluation of the fixed assets, as may be agreed
upon by the parties, shall be limited in the case of a merger or
consolidation, to bank premises and improvements, and bank
equipment which are necessary for its immediate accommodation in
the transaction of the bank's business. Such revaluation which
should be based on a fair valuation of the property shall be subject
to review and approval by the Central Bank.

2013 sBSP MANUAL OF REGULATIONS FOR NON-BANK FINANCIAL

INSTITUTIONS
3.
For merger/consolidation involving a bank, the BSP shall wait
for PDIC consent before elevating the proposed
merger/consolidation to the Monetary Board for approval; and
4.
The authority given to merge/consolidate the constituent
entities shall be valid within six (6) months reckoned after BSP
approval.
(M-2009-028 dated 12 August 2009)

February 26, 2016

BSP MANUAL OF REGULATIONS FOR BANKS

C. MERGER/CONSOLIDATION
SECTION 4108Q (2008-4111Q).
Merger/Consolidation Involving
Quasi-Banks. The merger/consolidation of QBs is encouraged to
meet minimum capital requirements and to develop larger and
stronger FIs. QBs which are IHs are likewise encouraged to merge
with banks to obtain authority to perform expanded commercial
banking functions.

For purposes of merger and consolidation of QBs, the following

definitions shall apply:
a.
Merger is the absorption of one (1) or more corporations by
another existing corporation, which retains its identity and takes
over the rights, privileges, franchises, and properties, and assumes
all the liabilities and obligations of the absorbed corporation(s) in
the same manner as if it had itself incurred such liabilities or
obligations. The absorbing corporation continues its existence while
the life or lives of the other corporation(s) is/are terminated.
b.
Consolidation is the union of two (2) or more corporations into
a single new corporation, called the consolidated corporation, all the
constituent corporations thereby ceasing to exist as separate
entities. The consolidated corporation shall thereupon and
thereafter possess all the rights, privileges, immunities, franchises
and properties, and assume all the liabilities and obligations of each
of the constituent corporations in the same manner as if it had itself
incurred such liabilities or obligations.
4108Q.1. Requirement of Bangko Sentral Approval. Mergers and
consolidations involving QBs shall comply with the provisions of
applicable law and shall be subject to approval by the Bangko
Sentral.
The guidelines and procedures in the application for
merger/consolidation as shown in Appendix Q-51 shall be observed.
(M-2009-028 dated 12 August 2009)
4108Q.2. (Reserved)
X108.1 (2008-X111.1).
Requirement of Bangko Sentral
Approval. Mergers and consolidations including the terms and
conditions thereof shall comply with the provisions of applicable law
and are subject to approval by the Bangko Sentral.
The guidelines and procedures in the application for
merger/consolidation as shown in Appendix 87 shall be observed by
banks.
(As amended by M-2009-028 dated 12 August 2009)

February 4, 2016
EXECUTIVE ORDER NO. 198

APPROVING THE MERGER OF THE DEVELOPMENT BANK OF THE

PHILIPPINES AND THE LAND BANK OF THE PHILIPPINES
SECTION 2. Operational Merger of the Development Bank of the
Philippines and the Land Bank of the Philippines. The operational
merger of DBP and LBP, through the transfer of assets and liabilities
of DBP to LBP as the surviving entity, is hereby approved, subject to
the written consent of the Philippine Deposit Insurance Corporation
and approval of the Bangko Sentral ng Pilipinas (BSP). All reference
to the terms "merger" or "merged banks," as used in this Order, shall
be understood as referring to the above-stated operational merger.

THIRD DIVISION
[G.R. No. 195615. April 21, 2014.]
BANK OF COMMERCE, petitioner, vs. RADIO PHILIPPINES NETWORK,
INC., INTERCONTINENTAL BROADCASTING CORPORATION, and
BANAHAW BROADCASTING CORPORATION, THRU BOARD OF
ADMINISTRATOR, and SHERIFF BIENVENIDO S. REYES, JR., Sheriff,
Regional Trial Court of Quezon City, Branch 98, respondents.
The Corporation Code requires the following steps for merger or
consolidation:
(1)
The board of each corporation draws up a plan of merger or
consolidation. Such plan must include any amendment, if necessary,
to the articles of incorporation of the surviving corporation, or in
case of consolidation, all the statements required in the articles of
incorporation of a corporation.
(2)
Submission of plan to stockholders or members of each
corporation for approval. A meeting must be called and at least two
(2) weeks' notice must be sent to all stockholders or members,
personally or by registered mail. A summary of the plan must be
attached to the notice. Vote of two-thirds of the members or of
stockholders representing two-thirds of the outstanding capital
stock will be needed. Appraisal rights, when proper, must be
respected.
(3)
Execution of the formal agreement, referred to as the articles
of merger o[r] consolidation, by the corporate officers of each
constituent corporation. These take the place of the articles of
incorporation of the consolidated corporation, or amend the articles
of incorporation of the surviving corporation. AHcaDC

(4)
Submission of said articles of merger or consolidation to the
SEC for approval.
(5)
If necessary, the SEC shall set a hearing, notifying all
corporations concerned at least two weeks before.
(6)

Issuance of certificate of merger or consolidation. 14

SEC
May 1, 1980
BATAS PAMBANSA BLG. 68
THE CORPORATION CODE OF THE PHILIPPINES

SECTION 79.
Effectivity of merger or consolidation. The
articles of merger or of consolidation, signed and certified as herein
above required, shall be submitted to the Securities and Exchange
Commission in quadruplicate for its approval: Provided, That in the
case of merger or consolidation of banks or banking institutions,
building and loan associations, trust companies, insurance
companies, public utilities, educational institutions and other special
corporations governed by special laws, the favorable
recommendation of the appropriate government agency shall first be
obtained. If the Commission is satisfied that the merger or
consolidation of the corporations concerned is not inconsistent with
the provisions of this Code and existing laws, it shall issue a
certificate of merger or of consolidation, at which time the merger or
consolidation shall be effective.
If, upon investigation, the Securities and Exchange Commission has
reason to believe that the proposed merger or consolidation is
contrary to or inconsistent with the provisions of this Code or
existing laws, it shall set a hearing to give the corporations
concerned the opportunity to be heard. Written notice of the date,
time and place of hearing shall be given to each constituent

corporation at least two (2) weeks before said hearing. The

Commission shall thereafter proceed as provided in this Code. (n)

March 18, 2015

INSURANCE CIRCULAR LETTER NO. 011-15

10.
Commissioner's Approval of Plan of Merger/Consolidation.
After a review, the Commissioner shall then approve or deny the
Plan of Merger/Consolidation and the Articles of
Merger/Consolidation. In case the Commissioner denies the Plan of
Merger/Consolidation, the reason/s for such denial should be stated.

March 11, 2016

PDIC BULLETIN NO. 08-16

Regulatory Approvals of the Merger or Consolidation

The FA shall assist the Proponent Banks in securing the
regulatory consents and/or approval of the PDIC, BSP and SEC as
provided under existing laws for all banks on mergers or
consolidations such as but not limited to assistance in the
preparation of the requisite documents related to (a) approval of
PDIC and BSP, (b) registration of the Surviving Bank with the SEC
(such as Plan of Merger or Consolidation including business plan and
organizational structure, Articles of Merger or Consolidation and ByLaws, audited financial statements, long-form audit report, etc.),
and (c) securing Certificate of Authority to operate the Surviving
Bank from the BSP.

Engagement Period

The submission of complete documentary requirements to the

BSP and PDIC for the purpose of securing approval of the Merger or
Consolidation of the Proponent Banks shall not exceed 60 calendar
days from the date the FA Final Report was duly approved by the
Proponent Banks' respective board of directors and shareholders.
C.

Other Advisory Services

The FA shall also undertake to:

1.
Provide advice and allow consultations on other matters and/or
possible issues related to the merger or consolidation and other
documentary requirements to be submitted by the Proponent Banks
under the Program;
2.
Attend meetings/negotiations and make presentations in
connection to its duties and responsibilities under the engagement;
3.
Liaise with the BSP, PDIC, SEC, Bureau of Internal Revenue
(BIR) and other regulatory agencies/entities; and
4.
Provide other financial and legal services as may be necessary
to ensure the success of the merger or consolidation under the
Program.

SECOND DIVISION
[G.R. No. 181789. February 3, 2016.]
GMA NETWORK, INC., petitioner, vs. NATIONAL TELECOMMUNICATIONS
COMMISSION, CENTRAL CATV, INC., PHILIPPINE HOME CABLE HOLDINGS, INC.,
AND PILIPINO CABLE CORPORATION, respondents.
DECISION

Resolving the propriety of the issuance of a cease and desist order based on
the petitioner's factual allegations and legal basis, we find that the petitioner
failed to clearly establish its right to be protected under Section 20 (g) of the
Public Service Act. The petitioner alleged that the respondents have
consolidated their operations without the requisite approval from the NTC.
Section 20 (g) of the Public Service Act provides as follows:
Acts requiring the approval of the Commission. Subject to established
limitations and exceptions and saving provisions to the contrary, it shall be
unlawful for any public service or for the owner, lessee or operator thereof,
without the approval and authorization of the Commission previously had:
ETHIDa
xxx

xxx

xxx

(g)
To sell, alienate, mortgage, encumber or lease its property, franchises,
certificates, privileges, or rights or any part thereof; or merge or consolidate
its property, franchises privileges or rights, or any part thereof, with those of
any other public service. The approval herein required shall be given, after
notice to the public and hearing the persons interested at a public hearing, if
it be shown that there are just and reasonable grounds for making the
mortgaged or encumbrance, for liabilities of more than one year maturity, or
the sale, alienation, lease, merger, or consolidation to be approved, and that
the same are not detrimental to the public interest, and in case of a sale, the
date on which the same is to be consummated shall be fixed in the order of
approval: Provided, however, that nothing herein contained shall be
construed to prevent the transaction from being negotiated or completed
before its approval or to prevent the sale, alienation, or lease by any public
service of any of its property in the ordinary course of its business. (emphasis
supplied)
Clearly, the above provision expressly permits the negotiation or completion
of transactions involving merger or consolidation of property, franchises,
privileges or rights even prior to the required NTC approval.

Applying Section 20 (g) of the Public Service Act to the present case, the
respondents' negotiation and even completion of transactions constituting
the alleged consolidation of property, franchises, privileges, or rights by
themselves are permitted and do not violate the provision. What the
provision prohibits is the implementation or consummation of the transaction
without the NTC's approval.