Section 5
SEC. 5. Section Twelve of Republic Act No. 85 as amended, is hereby further amended to read as follows: "SEC. 12. The trust fund shall be used by the Bank in assisting private development banks as follows: To pay for its subscription to preferred shares of stock in said private development banks in the manner and subject to the terms and conditions prescribed in section nine hereof; To rediscount promissory notes and other credit instruments held by the private development banks under the following conditions and limitations. It charges such rediscount or interest rates as it may determine taking into account that the main objective of the private development banks is to engage in medium-and long-term loans for economic development. The determination of such rediscount or interest rates acceptable to the bank for purposes of this provision shall be made by the said bank upon or immediately after the commencement of operations of a private development bank; Funds so acquired shall be used only to finance the establishment and operation of projects within the program of the Bank, or along such projects and activities as the Bank may, from time to time, approve." "SEC. 14. Board of Governors.—The affairs and business of the Bank shall be directed, its powers exercised, and its property managed and preserved by a Board of Governors consisting of the Chairman and eight other members to be appointed by the President of the Philippines. The Chairman and four members of the Board to be designated by the President shall render full time service to the Bank. The term of office of the Chairman and other members of the Board shall be seven years, except that of the first members which shall be one, two, three, four, five, six and seven years and which shall be specified in their respective appointments. The compensation of the Chairman and other members of the Board shall be fixed by the President of the Philippines who may remove any of them for cause. The President may designate as Vice-Chairman one of the eight members of the Board. In the absence or temporary incapacity of the Chairman, the Vice-Chairman shall exercise the powers and functions of the Chairman. No person shall be appointed chairman or member of the Board of Governors unless he be of good moral character and unquestionable integrity and be of recognized competence in economics, agriculture, industry, finance and/or banking.