Section 2January 2, 1992, Sec./Art. 2

Settlement of Liabilities. – The National Government deposit of One billion four hundred eighty-nine million pesos (P1,489,000,000.00) with the Veterans Bank is hereby restructured into a seven-year promissory note of the said bank, carrying an interest rate of four percent (4%) per annum effective on the date of actual operation: Provided, That only the interest shall be paid in the first three (3) years: Provided, further, That repayment of the principal shall be divided into four (4) equal amortizations: Provided, finally, that the said promissory note shall be exempted from the reserve equipment rule of commercial banks.1awphi1©

The accrued interests due to the National Government deposits up to and during the time of the Veterans Bank's closure in 1985 and the tax liabilities incurred by the Veterans Bank also up to and during the time of the Veterans Bank's closure are hereby condoned and extinguished.

The obligations of the Veterans Bank with the Central Bank of the Philippines and the Philippine Deposit Insurance Corporation are hereby restructured in the same manner governing National Government deposits provided in the first paragraph of this section.

With respect to deposits of local government units and other private deposits with the Veterans Bank, the terms and conditions for the retention or withdrawal thereof shall be negotiated individually but may carry more favorable terms in favor of the Veterans Bank.