M a n i l a
PRESIDENTIAL DECREE No. 236 July 9, 1973
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 by 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;
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. Sec. 3 (b) of Republic Act Numbered Thirty- five eighteen is amended to read as follows:
"(b) At least fifty-one per cent (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 Sec. 4, Subsection (c) of this Act, and shall be initially paid from the Veterans Trust Fund provided for in Sec. 2, subsection (d) 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 of fraction thereof. The balance of about forty-nine (49%) per cent 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 for 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, orphans or compulsory heir shall be issued a total of more than one hundred shares."
Sec. 2. Sec. 6, Subsection (a) of Republic Act Numbered Thirty-five hundred and eighteen is hereby amended to read as follows:
"Sec. 6. Qualifications of 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 five 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. 1103 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 1081, as amended by Proclamation No. 1103, 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. Sec. 8 of the same Act is amended to read as follows:
"Sec. 8. President and Vice Presidents 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-President and such other Vice-Presidents shall be fixed by the Board of Directors.
Sec. 4. Sec. 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 per cent (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 per cent (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 per cent (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 Sec. 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 per cent (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 Federations 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; 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 votes 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. Sec. 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-ad-initio and deemed contrary to law.
Sec. 7. The same Act is further amended by adding the following section immediately after Sec. 27 thereof, which read 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.