Article 123Labor and Agrarian Laws and Social Legislation, p. 123

LABOR LAWS AND SOCIAL LEGISLATION SPECIAL LAWS AND IMPLEMENTING RULES AND REGULATIONS

Amounts expended for the administration of the Bank

shall not be deemed as a participation of the government

in income: Provided , That the Bank may declare all its

earnings accumulated prior to the issuance of preferred

shares as stock dividends to the government as the sole

shareholder of the Bank or in lieu of dividends, set aside

said earnings as contributed surplus to serve as fund for

the guaranteed dividend to preferred shareholders. The

manner of distributing the surplus shall be determined

by the Board of Directors. (Amendments to R.A. No. 3844

(Code of Agrarian Reform), Presidential Decree No. 444,

[May 4, 1974])

Section 83. Preferred Shares - All preferred shares or

stock issued under Section seventy-seven of this Code

shall be entitled to the income earned by the Bank on its

investments and other operations: Provided , That the

holders of such preferred shares of stock shall not bring

derivative suits against the Bank. Such preferred shares

shall be fully transferable: Provided, further , That upon the

liquidation of the Bank, the redemption of such preferred

shares shall be given priority. (Amending R.A. No. 3844 As

Amended (Code of Agrarian Reform), Presidential Decree

No. 251, [July 21, 1973])

Section 84. Voting of Shares - The voting power of all the

common

shares

of

stock

of

the

Bank

owned

and

controlled by the Government shall be vested in the

President of the Philippines or in any ex-officio member

of

the

Board

of

Directors of the Bank as he may

designate. (Amending R.A. No. 3844 As Amended (Code

of Agrarian Reform), Presidential Decree No. 251, [July 21,

1973])

Section 85. Use of Bonds - The bonds issued by the Bank

may be used by the holder thereof and shall be accepted

for any of the following:

1. Payment for agricultural lands or other real

properties purchased from the Government.

2. Payment for the purchase of shares of stock or

assets or government-owned or controlled corporations.

Upon offer by the bondholders, the corporation

owned or controlled by the Government shall, through its

Board of Directors, negotiate with such bondholder with

respect to the price and other terms and conditions of

the sale. In case there are various bondholders making

the offer, the one willing to purchase under terms and

conditions most favorable to the corporation shall be

preferred. If no price is acceptable to the corporation, the

same

shall

be

determined

by

the

Committee

of

Appraisers

composed of three members, one to be

appointed by the corporation, another by the bondholder

making the highest or only offer, and the third by the two

members, so chosen. The expense of appraisal shall be

borne equally by the corporation and the successful

purchaser.

Should the Government offer for sale to the

public any or all the shares of stock or the assets of any of

the Government-owned or controlled corporations, the

bidder who offers to pay in bonds of the Land Bank shall

be preferred, provided that the various bids be equal in

every respect except in the medium of payment.

3. Surety, bail bonds for the provisional release of

accused person or performance bonds in all cases where

the Government may require or accept real property as

bonds.

4. Security for loans applied with the Philippine

National Bank, Development Bank of the Philippines,

Government Service Insurance System, Social Security

System,

and

other government financial institutions,

existing charters of these institutions to the contrary

notwithstanding.

5. Payment for reparations goods the provisions

of Republic Act Nos. 1789 as amended, to the contrary

notwithstanding.

(Amendments

to

RA

No.

3844

(Agricultural Land Reform Code), Republic Act No. 6389,

[September 10, 1971], further amended by Presidential

Decree No. 251, [July 21, 1973])

Section 86. Board of Directors; Membership; Per Diem . —

The affairs and business of the Bank shall be directed and

its property managed and preserved by a Board of

Directors consisting of nine (9) members to be composed

of the Secretary of Finance, as Chairman, the President of

the Bank as Vice-Chairman, the Secretary of Agrarian

Reform, the Secretary of Labor, and the Secretary of

Agriculture as ex officio members. The President of the

Philippines shall appoint two (2) members of the Board

who shall represent the agrarian reform beneficiaries and

two (2) members who shall represent the private sector.

The two (2) remaining members shall be elected from the

shareholders coming from the public sector to the extent

that they may be entitled to two (2) seats in proportion to

the outstanding capital stock.

Annually, on the first Tuesday after the first Monday in

December,

the

stockholders

shall

meet to take up,

among others, the election of two (2) members of the

Board

of

Directors

for

the

succeeding

year.

Each

shareholder or proxy shall be entitled to as many votes as

he may have shares of stock registered in his name of the

31st day of October last preceding and held by him at the

time of the election. The two (2) members of the Board of

Directors shall be elected preferably from the holders of

the preferred shares on the basis of the outstanding

amount of shares as follows:

(a) Not exceeding P100.0 M — one member

(b) Exceeding P100.0 M — two members

The appointive members of the Board shall hold a term of

office for one (1) year and shall continue to hold office

until their successor shall have been appointed and

qualified. The Board shall convene as often as necessary

to discharge its responsibilities properly, but shall meet at

least once every two (2) weeks. The Board may be

convoked either by the Chairman or in his absence, the

Vice-Chairman.

The majority of the board members shall constitute a

quorum . All decisions of the Board shall require the

concurrence of at least a majority.

No person shall be elected or appointed director of the

Bank unless he is natural born citizen of the Philippines,

not less than thirty-five (35) years of age, of good moral

character, and has attained proficiency, expertise and

recognized competence in one or more of the following:

banking, finance, economics, law, agriculture, agrarian

reform, business management: Provided, further , That no

director, shareholder or employee of any other bank shall

be eligible for election or appointment as member of the

Board of Directors of the Bank.

The Chairman and the members of the Board shall

receive a per diem of One thousand five hundred pesos

(P1,500) for each session of the Board attended but in no

case not to exceed Seven thousand five hundred pesos

(P7,500) a month. (Amendments to R.A. No. 3844 (Code of

Agrarian Reform), Presidential Decree No. 444, [May 4,

1974], further amended by Presidential Decree No. 1039,

[October 21, 1976], and Republic Act No. 7907, [February

23, 1995])

Section 86-A . Powers and Responsibilities of the Board .

— The Board of Directors shall have, among others, the

following specific powers and responsibilities:

1. Formulate policies, rules and regulations for the

effective operation of the Bank;

2. Take decisions concerning loans as well as fix

the rates of interest thereon, guarantees, investments,

borrowing by the Bank, furnishing of technical assistance

and other operations of the Bank;

3. Establish such branches and agencies as may

be deemed necessary and convenient;

4. Provide for the appointment and removal and

fix the reasonable compensation of such personnel as

may be necessary for the expeditious conduct of the

business of the Bank; and

© Compiled By RGL

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