QuestionsQuestions (Republic Act No. 11597)
The law declares the State’s policy to execute a viable plan to promote the welfare of Filipino war veterans and retired military personnel (including surviving spouses, orphans, and compulsory heirs) by fostering their socioeconomic security and general well-being through efficient and effective revitalization of the Philippine Veterans Bank, which is imbued with public interest.
It is created as the Philippine Veterans Bank, commonly called the Veterans Bank. Its principal domicile and place of business is at PVB Building, 101 V.A. Rufino corner Dela Rosa Streets, Legaspi Village, Makati City.
The Veterans Bank may promulgate bylaws, adopt a corporate seal, sue and be sued, carry on trust business subject to laws and BSP rules, grant loans and advances with preference to veterans, invest in stocks and other instruments, issue bonds, contract obligations essential to management, appoint/dismiss officers and employees, and exercise general corporate powers consistent with the Revised Corporation Code and the General Banking Law.
The authorized capital stock is P10,000,000,000.00 divided into 75,000,000 common shares and 25,000,000 preferred shares, each with par value of P100.00.
Yes. While shares may be opened for investment to non-veterans, the law requires that at all times the majority of the common shares shall be held by veterans as defined under the Act.
Primarily persons who served in regularly constituted air, land, or naval services (or non-regularly organized military units in the Philippines) during World War II with duly recognized service by the Republic of the Philippines or the U.S. government, plus widows, orphans, and compulsory heirs as determined by existing laws. It also includes veterans referred to under RA 6948 as amended by RA 9396. Post-WWII veterans and AFP retirees enjoy benefits after investing in the Veterans Bank.
The share of each beneficiary (war veteran, widow, orphan, or compulsory heir) in the distribution of benefits and in ownership of shares is equal regardless of rank and services rendered. Orphans of a deceased veteran are counted as one unit only, and all of them together receive the same share as a surviving war veteran or surviving widow.
The bank may not directly or indirectly grant loans to any director, officer, employee, or agent. No loans to a corporation/partnership/company where a Board member is a shareholder/agent/employee are allowed except by unanimous Board vote of members present, excluding the interested member. Also, total liabilities to the bank of such related corporation/entity must not exceed 5% of the Veterans Bank’s surplus and paid-up capital at any time.
The President may approve loans, investments, and other instruments in accordance with RA 8791 and BSP rules, but total amount shall not exceed 5% of paid-up capital and surplus. Any approval exceeding that limit must be approved by the Board of Directors.
The Board of Directors consists of 15 members, five (5) of whom shall be independent directors.
They are elected annually by stockholders in the manner prescribed by the Revised Corporation Code (RA 11232), in proportion to shareholdings of veterans and non-veterans, and must have formal business training/expertise in banking and finance and meet BSP disqualifications/qualifications. Unless allowed by BSP rules, no director/officer/employee of another bank may be eligible for the Veterans Bank board except independent directors.
Members receive per diem/allowance for every board meeting actually attended. The amount must be within acceptable banking industry rates and set according to relevant provisions of RA 11232.
The Veterans Bank is subject to supervision and examination by the BSP under the New Central Bank Act (RA 7653, as amended) and RA 8791.
The Secretary of Finance, Governor of the BSP, Monetary Board members, and the head of the Auditing Department are prohibited from owning stock in the Veterans Bank or from becoming indebted to it directly or indirectly, except that the auditing head may be allowed if the head is a veteran stockholder or heir.
No fee, charge, or commission in any form may be exacted, demanded, or paid for obtaining loans. Violators (directors, officers, employees, or agents) who receive fees for the service or for the use of influence in obtaining a loan may be punished by a fine not exceeding P100,000 or imprisonment not more than 5 years, or both.
At year-end, 20% of net profit goes to a reserve account. From the remaining net profit, guaranteed earnings of preferred shares and 10% dividends on common shares are deducted. Thereafter, 20% of net profit after those deductions, or P30,000,000 (whichever is lower), is paid in cash to BTVWW II for grant-in-aid to veterans/widows/orphans/compulsory heirs for educational, social, charitable, and rehabilitation purposes, subject to accounting and annual audit by an external auditing firm. The remaining profits are at the disposition of the Board in accordance with RA 11232, RA 8791, and BSP rules.
When post-WWII veterans and AFP retirees’ shareholdings surpass those of WWII veterans and their compulsory heirs. BTVWW II is reorganized into an 11-member Board of Trustees elected from among all veterans by the Veterans Bank stockholders in the annual stockholders meeting. The members elect a Chairperson and Vice-Chairperson among themselves, serve without compensation except actual and necessary expenses, and a majority vote of all members is required to authorize disposal of funds held by the board. Prior powers of BTVWW II are transferred to the new Board.
RA 11597 repeals Republic Act No. 3518 as amended. It also repeals or modifies provisions of RA 7169 and the Veterans Bank’s existing Articles of Incorporation/Bylaws that are inconsistent with RA 11597, and repeals/modified other laws/acts/executive orders/administrative orders/rules inconsistent with the Act.