Section 2Sec./Art. 2

Section 3 of the same Act is hereby further amended to read as follows:

"BOARD OF DIRECTORS: COMPOSITION AND AUTHORITY

"Section 3. (a) The powers and functions of the Corporation shall be vested in and exercised by a Board of Directors which shall be composed of seven (7) members as follows:

"(1) The Governor of the Bangko Sentral ng Pilipinas who shall be the ex officio Chairperson of the Board without compensation;

"(2) The Secretary of Finance who shall be the ex officio Vice Chairperson and member of the Board without compensation;

"(3) The President of the Corporation, who shall be appointed by the President of the Philippines from a shortlist prepared by the Governance Commission for Government-Owned or -Controlled Corporations pursuant to Republic Act No. 10149, or the "GOCC Governance Act of 2011" to serve on a full-time basis for a term of six (6) years;

"(4) Four (4) members from the private sector to be appointed by the President of the Philippines from a shortlist prepared by the Governance Commission for Government-Owned or -Controlled Corporations pursuant to Republic Act No. 10149. The appointive directors shall serve for a term of six (6) years unless sooner removed for cause and shall be subject to only one (1) reappointment: Provided, That of those first appointed, the first two (2) appointees shall serve for a period of three (3) years: Provided, however, That the appointive director shall continue to hold office until the successor is appointed.

An appointive director may be nominated by the Governance Commission for Government-Owned or -Controlled Corporations for reappointment by the President only if the appointive director obtains a performance score of above average or its equivalent or higher in the immediately preceding year of tenure as appointive director based on the performance criteria for appointive directors of the Corporation.

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"The Secretary of Finance and the Governor of the Bangko Sentral ng Pilipinas may each designate an alternate, who shall be an official with a rank not lower than assistant secretary of the Department of Finance or Deputy Governor of the Bangko Sentral ng Pilipinas with written authority from the Secretary of Finance or the Governor of the Bangko Sentral ng Pilipinas, to attend such meetings and to vote on behalf of their respective principals. Whenever the Chairperson of the Board is unable to attend a meeting of the Board, or in the event of a vacancy in the office of the Governor of the Bangko Sentral ng Pilipinas, his or her designated alternate shall preside. In the absence of the Chairperson and his or her designated alternate, the Secretary of Finance or his or her representative shall preside.

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"(b) The Board of Directors shall have the authority:

"(1) To approve and issue rules and regulations for banks and the depositing public, as it considers necessary for the effective discharge of its responsibilities under this Act including the establishment of separate insurance funds, and insurance arrangements or structures or takaful, taking into consideration the peculiar characteristics of Islamic banking. This authority includes increasing of the insurance coverage, eligibility of the institutions, assessment premium rate, and other implementation rules and regulations.

"For purposes of this Act, takaful shall be defined as a mutual guarantee in return for the commitment to donate an amount in the form of a specified contribution to the covered entities' risk fund, whereby a group of covered entities agree among themselves to support one another jointly for the losses arising from specified risks;

"x x x

"(4) To appoint and remove any officer or employee of the Corporation, for cause, subject to pertinent civil service laws: Provided, That the Board of Directors may delegate this authority to the President subject to specific guidelines: Provided, further, That in no case shall there be any diminution of existing salaries, benefits and other emoluments;

"(5) To approve policy on local and foreign travel, and the corresponding expenses, allowances and per diems, of officers, employees, agents of the Corporation, which shall be comparable with the expenses, allowances and per diems of personnel of other financial institutions based on prevailing market standards, notwithstanding the provisions of Presidential Decree No. 1177, Executive Order No. 292, Executive Order No. 248, as amended, Executive Order No. 298, and similar laws;

"(6) To adopt an annual budget for, and authorize such expenditures by the Corporation, as are in the interest of the effective administration and operation of the Corporation;

"(7) To approve the target level of the Deposit Insurance Fund (DIF) and the methodology for determining reserves for insurance and financial assistance losses;

"(8) To review the organizational set-up of the Corporation and adopt a new or revised organizational structure as it may deem necessary for the Corporation to undertake its mandate and functions;

"(9) To design, adopt and revise, as it may deem necessary, an early separation plan for employees of the Corporation to ensure availability of a human resource pool qualified and capable of implementing the Corporation's authorities under this Charter in a manner responsive and attuned to market developments, and to provide incentives for all those who shall be separated from the service. Notwithstanding any law to the contrary, these incentives shall be in addition to all gratuities and benefits the employee is entitled to under existing laws; and

"(10) To promote and sponsor the local or foreign training or study of personnel in the fields of banking, finance, management, information technology and law. Towards this end, the Corporation is hereby authorized to defray the costs of such training or study. The Board shall prescribe rules and regulations to govern the training or study programs of the Corporation."