Section 16May 23, 2008, Sec./Art. 16

Section 12 of the same Act, as amended, is hereby further amended to read as follows:

"SEC. 12. Capitalization and Funding of the SB Corporation. - The SB Corporation shall have an authorized capital stock of Ten billion pesos (P10,000,000,000.00). The initial capital of One billion pesos (10,000,000,000.00) shall be established from a pool of funds to be contributed in the form of equity investment in common stock by the Land Bank of the Philippines (LBP), the Development Bank of the Philippines (DBP), in the amount of Two hundred million pesos (P200,000,000.00) each. the Social Security System (SSS) and the Government Service Insurance System (GSIS) shall also set aside Two hundred million pesos (P200,000,000.00) each for the SB Corporation.

Authorized capital stock of the small business corporation shall be divided into 80,000,000 common shares and 20,000,000 preferred shares with a par value of One hundred pesos (P100.00) per share: Provided, That common shares, which have been issued, including those issued against assets of the KKK Guaranty Fund consolidated under the small business corporation by virtue of Executive Order No. 233, Series of 2000 and Executive Order No. 19, Series of 2001 and including those already subscribed, shall form part of the capitalization of the corporation: Provided, further, That holders of preferred shares issued under Republic Act No. 6977, as amended, shall have the option to convert the same into common shares.

Additional equity shall come from trust placements of excess and unused funds of existing government agencies, bilateral and multilateral official development assistance funds, subscriptions from government owned or controlled corporations, and investments of private financial institutions and corporations: Provided, finally, That any investment from the private sector shall only be in the form of preferred shares.

"To allow for capital build-up, SB Corporation shall be given a five (5) year grace period on dividend commitments beginning on the date of effectivity of this amendment. Thereafter, it may only declare as dividend not more than thirty percent (30%) of its net income and the rest withheld as retained earnings."