AMENDING REPUBLIC ACT NUMBERED THIRTY-FIVE HUNDRED AND EIGHTEEN ENTITLED “AN ACT CREATING THE PHILIPPINE VETERANS BANK AND FOR OTHER PURPOSES.”

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. 3518, entitled “An Act
Creating the Philippine Veterans Bank and for Other Purposes” which are vital to
the national development program of the Government;

WHEREAS, one of these priority measures is the bill seeking
to amend the Charter of the Philippine Veterans Bank defining the manner of
electing the members of the Board of Directors;

WHEREAS, it is necessary to effect reforms in the bank’s
operation and to revitalize its structure as an important instrument to promote
the national development program of the Government;

WHEREAS, the Court’s decision which is final and executory
has ordered the election of the members of the Board of Directors on the 2nd
Tuesday of July 1973;

WHEREAS, a study has been made for the purpose of remedying
the impossibility of notifying and gathering in one single place the 510,000
veterans for the purpose of electing the members of the Board of Directors, the
tremendous expenses involved, aside from the problems it will create before,
during and after the annual meeting of the stockholders; and

WHEREAS, the result of the study was an integrated set of
recommendations which were accepted by the veterans leaders, with modification
by the Veterans Bank, and made the basis for this Decree to effect the reforms
in the banking system and to render monetary and credit policies more responsive
to the requirement of economic development of the veterans of the country;

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 to Republic Act No. 3518 as follows:

SECTION 1. Section 3 (b) of Republic Act Numbered
Thirty-Five Hundred Eighteen is amended to read as follows:
“(b) At least
fifty-one percent (51%) of the capital stock of the Veterans Bank shall be
divided into common shares which shall be fully subscribed by the Government of
the Republic of the Philippines for and in behalf of the veterans, their widows,
orphans or compulsory heirs as defined and determined under Section 4,
Subsection (c) of this Act, and shall be initially paid from the Veterans Trust
Fund provided for in Section 2, Subsection (d) of Republic Act Numbered
Seventeen Hundred and Eighty-Nine, as amended, and from out of earnings,
dividends or profits from the operations of the Veterans Bank and for the
payment of said subscription, all the available cash deposits with the
Philippine National Bank and/or any other banks to the credit of the Veterans
Trust Fund shall be transferred immediately to the Veterans Bank:
Provided, That after the approval of this Act and notwithstanding the
provisions of any existing law and/or executive orders, rules and regulations to
the contrary every and all additional cash payments on account of the said
Veterans Trust Fund shall be remitted and paid directly and exclusively to the
said Veterans Bank to be applied as additional paid-up payments of the aforesaid
common shares subscription: Provided, further, That the Reparations
Commission shall remit in full to the Veterans Bank the balance of Twenty
Million Dollars Veterans Trust Fund, and if the accumulated proceeds of the said
fund should be insufficient to cover in full the said balance, the Reparations
Commission is hereby authorized to cover the deficiency from any funds under its
custody: Provided, furthermore, That nothing shall be transferred to,
or received by, the said Veterans Bank representing any portion of the proceeds
of the aforesaid Veterans Trust Fund except cash payments of the peso equivalent
thereof at the prevailing rate of exchange at the time the Reparations
Commission received such funds from the source. The shares shall be divided
equally among the veterans at the rate of one share of one hundred pesos for
each veteran or fraction thereof. The balance of about forty-nine (49%) percent
shall be divided into preferred shares which shall be opened for subscription by
any recognized veteran, widow, orphans or compulsory heirs of said veterans at
the rate of one (1) preferred share per veteran: Provided, That in case
of failure of any particular veteran to subscribe to any preferred share of
stock so offered to him as herein provided, within thirty (30) days
from date of receipt of notice, said share of stock shall be available for
subscription to other veterans in accordance with such rules or regulations as
may be promulgated by the Board of Directors. Any share of stock corresponding
to the capital stock subscribed and paid by the Republic of the Philippines in
the manner aforementioned, shall be issued in the name of the Republic of the
Philippines, in trust for the benefit of veterans, their widows, orphans or
compulsory heirs as determined in this Act, and any share of stock subscribed
and paid by individual Veteran shall be issued in the name of the individual
veteran, his widow, orphan or compulsory heir. The sale or transfer of a share
of stock of a veteran, widow, orphan or compulsory heir of a veteran shall not
be allowed under any circumstances. Any share may be sold or transferred to the
Bank which shall issue the same to the stockholders who are veterans, their
widows, orphan or compulsory heir: Provided, That no veteran, widow,
orphan or compulsory heir shall be issued a total of more than one hundred
shares.”

SEC. 2. Section 6, Subsection (a) of Republic Act Numbered
Thirty-Five Hundred and Eighteen is hereby amended to read as follows:

“SEC. 6. Qualifications and per diems of the Board of
Directors.

“(a) The affairs and business of the Veterans Bank shall
be directed and its property managed, controlled and preserved, unless otherwise
provided in this Act, by a Board of Directors consisting of eleven (11)
members to be composed of three (3) ex officio members to wit: the Administrator
of the Veterans Affairs Office, the President of the Veterans Federation of the
Philippines, and the Secretary of National Defense, and the remaining members of
which five shall come from Luzon, two from Visayas, one from Mindanao who shall
be veterans of good standing, college graduates, with formal business training
and/or experience in banking and finance for a period of live years, and who are
all actually and physically residing in their region, shall be appointed by the
President of the Philippines, during the existence of Proclamation No. 1081,
dated September 21, 1972, as amended by Proclamation No. 1104, dated January 17,
1973, who shall hold office for one year and until their successors are duly
appointed and qualified. After the lifting of Proclamation No. 1081, as amended
by Proclamation No. 1104, the eight members of the Board of Directors shall be
elected annually by the stockholders of the respective region in the manner
prescribed by By-Laws of the Bank: Provided, That no director, officer,
or employee of any other bank shall be eligible as member of the Board of
Directors of the Veterans Bank: Provided, further, That the members of
the Board of Directors shall receive a per diem allowance of Fifty Pesos
(P50.00) for every meeting of the Board actually attended by
them.”

SEC. 3. Section 8 of the same Act is amended to read as
follows:

“SEC. 8. President and Vice-President —
Appointment and removal — Salaries. — The Chief Executive of the Bank shall
be the President who shall be chosen by the Board of Directors. He shall be
assisted by an Executive Vice-President and such other Vice-Presidents who shall
be elected and may be removed only for cause by the Board of Directors. The
President and the Executive Vice-President shall possess practical experience in
banking or finance as executives for at least five years. The salaries of the
President, Executive Vice-President and such other Vice-Presidents shall be
fixed by the Board of Directors.”

SEC. 4. Section 22 of the same Act is amended to read as
follows:

“SEC. 22. Allocation of Net Profits. — At the close
of each calendar year, the Bank shall determine the result of its operations, in
the determination of which, adequate allowances shall be made for probable
losses, and the resulting net profits after taxes shall be distributed as
follows:

“(a) Twenty percent (20%) of such net profit shall accrue to the reserve
account: Provided, That should the accumulated reserves equal the
authorized capital of the Bank, the twenty percent (20%) herein authorized shall
cease to accrue to the reserve account but shall be distributed pursuant to the
subsection immediately following:

“(b) From the remaining eighty percent (80%) of the net profit shall be
deducted the guaranteed earnings of the preferred shares of stock owned by the
individual veterans, their widows, orphans or compulsory heirs:
Provided, That the share in the net profits corresponding to the
Republic of the Philippines shall first be applied in payment of the Capital
Stock subscription, until said shares shall have been fully paid. Thereafter,
fifteen per centum (15%) of the net profit after deducting the guaranteed
earnings of the preferred shares shall be paid in cash and be held strictly as
Trust Fund by the Board of Trustees as hereinafter provided in Section
23 hereof and shall be available exclusively for ‘grants-in-aid’ to veterans,
their widows, orphans or compulsory heirs, for educational, social, charitable,
and rehabilitation purposes, to organizations doing services for the cause of
the veterans, and for such other purposes beneficial to the veterans:
Provided, however, That the equivalent of not to exceed five percent
(5%) of every annual cash payment made to the Board of Trustees as aforesaid
shall be available for expenses of administration, office equipment and
supplies, actual and necessary expenses incurred by members of the Board of
Trustees either in attendance upon meeting of the Board or upon other official
business authorized by resolution thereof, and for fixed compensation of a Board
Secretary and such other officials and employees of said Board of Trustees:
Provided, further, That no amount of grants-in-aid exceeding Five
Hundred Pesos (P500.00) shall be granted to any indigent veteran, widow, orphan
or compulsory heir under such rules and regulations promulgated by the Board of
Trustees: and Provided, furthermore, That any and all expenditures of
said trust funds shall be subject to audit by the Auditor of the Department of
National Defense in accordance with generally accepted accounting practices. The
Auditor of the Department of National Defense shall serve as ex officio Auditor
of the Board of Trustees.

“After paying the share of the Board of Trustees of the veterans of World War
II, such percentage of the net profits shall be paid in cash to the Veterans
Federation of the Philippines as shall be deemed necessary to fund its
operations and attain the objectives set forth in R.A. No. 2640:
Provided, That any and all expenditures of said fund by the Veterans
Federation of the Philippines shall be subject to audit by the Auditor of the
Department of National Defense in accordance with the generally accepted
accounting practices, and a report of such audit be submitted to the Secretary
of National Defense.

“The balance may be distributed as dividends to holders of common stocks:
Provided, That no dividends shall be distributed until full payment of
the subscribed common shares of stocks.”

SEC. 5. Sec. 23 of the same Act is amended to read as
follows:

“SEC. 23. Board of Trustees of World War II. –
There is hereby created a Board of Trustees for the Veterans of World War II to
be known as ‘The Board of Trustees of the Veterans of World War II,’ consisting
of eleven (11) members, two (2) of whom shall be ex officio members and nine (9)
regular members. The ex officio members shall be the President of the Veterans
Federation of the Philippines and the Administrator of the Veterans Affairs
Office. The nine (9) regular members shall be elected by the Supreme Council of
the Veterans Federation of the Philippines organized pursuant to Republic Act
Numbered Twenty-Six Hundred and Forty.

“The Board of Trustees of the Veterans of World War II shall be a continuing
board, and the term of the regular members thereof shall be three (3) years and
shall serve as such until their successors shall have been elected and have
qualified. The first regular members hereunder elected shall serve as follows:
The first group who shall serve for a full term of three (3) years shall consist
of those obtaining the three highest number of votes; the next three (3) highest
votes shall serve for a term of two (2) years; and the rest shall belong to the
third group who shall serve for a term of one (1) year.

“The Board of Trustees shall, upon a majority vote of all its members, elect
its Chairman, vice chairman, and secretary, which secretary may or may not be a
member of the Board, at such time and place as shall be provided for in
its by-laws. The Board shall appoint such personnel as may be necessary and fix
their compensation.
“Per diem allowance for every meeting of the Board
actually attended by such members shall not exceed fifty pesos (P50.00)
each.”

SEC. 6. Section 27 of the same Act is hereby amended by
adding a second sentence thereto, so that as amended, said Section will read as
follows:

“SEC. 27. Veterans Bank authorized to receive deposit of
government funds as a Government Depository. — The Secretary of Finance,
the National Treasurer and his authorized representative, city and municipal
treasurers as well as official custodians of public funds or those belonging to
government-owned or controlled corporations are hereby authorized to make and
actually maintain deposits of any government or corporation funds with the
Veterans Bank, which is hereby declared to be a government
depository. The
provisions of existing laws to the contrary notwithstanding, the status of the
Veterans Bank as a government depository is hereby made permanent, and for this
purpose only and all attempts to render the provisions of the Section nugatory
shall be void ab initio and deemed contrary to law.”

SEC. 7. The same Act is further amended by adding the
following section immediately after Section 27 thereof, which reads as
follows:

“SEC. 27-A. —Membership in the Government Service
Insurance System. — All permanent officials and employees of the Veterans
Bank and the Board of Trustees of the Veterans of World War II shall be members
of the Government Service Insurance System for purposes of insurance and
retirement.”

SEC. 8. This Decree shall take effect immediately.

Done in the City of Manila, this 9th day of July, in the year of Our Lord,
nineteen hundred and seventy-three.

			(Sgd.) FERDINAND E. MARCOS President Republic of the Philippines
	By the President:
	(Sgd.) ROBERTO V. REYES
		Assistant Executive Secretary