Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
First Regular Session

HB. no.__564

Introduced by HONORABLE JUAN EDGARDO “SONNY” M. ANGARA

EXPLANATORY NOTE

Mainland Mindanao is the second biggest island in the country, next only to mainland

Luzon. It is also very rich in natural, mineral and aquatic resources, making it the land of hope or
the land of promise.

This bill seeks to establish the Mindanao Railways Corporation. This corporation will
provide the railroad and the transportation system sorely needed by the island. The railroad,
which will crisscross Mindanao, will benefit the whole island's populace. It will accelerate
economic activity, immensely benefiting the traders and businessmen.

The railroad will also hopefully connect the major urban centers and provincial capitals
such as Davao City, lligan, Cagayan de Oro, Zamboanga City, Cotabato City, Marawi,
Pagadian, Dipolog, etc. Many of these urban centers are booming. The railway will certainly
increase considerably the mobility of the population.

Mindanao has long been a neglected area, and this had caused unrest, resentment,
even rebellion from some native groups. Its distance from Metro Manila has made it the frontier
of the Philippines. The creation of the Mindanao Railways Corporation will be a long way in
convincing the Mindanaonons that the national government sincerely cares for them and is
willing to exert efforts in bringing projects which will bolster the region's economy.

In view of the foregoing reasons, approval of this bill is earnestly requested.

oo ~
JUAN EDGARDO “SONNY” M. ANGARA
Representative

Lone District, Province of Aurora


FIFTEENTH CONGRESS OF THE)
REPUBLIC OF THE PHILIPPINES —)
First Regular Session )

561
H.B.No.

Introduced by Honorable JUAN EDGARDO “SONNY” M. ANGARA

AN ACT
CREATING THE MINDANAO RAILWAYS CORPORATION,
PRESCRIBING ITS POWERS, FUNCTIONS AND DUTIES, AND
PROVIDING FOR THE NECESSARY FUNDS FOR ITS OPERATION

Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:

SECTION 14. Name, Duration and Domicile. A corporation to serve as the
instrumentality of the Government of the Philippines in providing a railroad and the
transportation system for the whole island of Mindanao is hereby created, to be known as the
Mindanao Railways Corporation, and hereafter referred to as the Corporation. The Corporation
shall exist for a term of fifty (50) years from the date of the approval of this
Act. It shall have its main office in Davao City and shall have such branches and agencies within
or outside Mindanao as may be necessary for the proper conduct of its business.

SEC. 2, Purposes and Specific Powers. The Corporation shall have the following
purposes and specific Powers:

(a) To own or operate railroads, tramways, and other kinds of land transportation,
vessels and pipelines, for the purpose of transporting for consideration, passengers,
mails and property between any point in Mindanao. .

(b) As an auxiliary to its main purpose, to own and/or operate powerhouses, hotels,
restaurants, terminals, warehouses, timber concessions, coal mines, iron and other
mineral properties and to manufacture rolling stocks, equipment, tools and other
appliances, to construct and operate in connection with its railroad lines, toll viaducts,
toll tunnels and the like.

SEC. 3. Authorized Capital Stock of the Mindanao Railways Corporation. The
Authorized Capital Stock of the Mindanao Railways Corporation shall be One Billion Pesos
(P1,000,000,000.00) divided into Ten Million (P10,000,000.00) shares at par value shares of one
hundred pesos each (P100.00) which shall be fully subscribed by the Philippine Government,
twenty percent (20%) of which or Two Hundred million pesos (P200,000,000.00) shall be initially
paid-up and the balance shall be paid from a continuing annual appropriation of not less than
two hundred million pesos (P200,000,000.00) which is hereby appropriated out of any funds in
the


National Treasury not otherwise appropriated. The said amount shall be programmed and
released by the Budget Commission in accordance with the schedule of cash requirements to
be prepared and submitted by the Mindanao Railways Corporation. Provided, That this
continuing annual appropriation of Two Hundred million pesos (P200,000,000.00) and the
programming and release thereof shall remain in force until the authorized capital subscribed by
the Government shall have been paid in full.

SEC. 4. General Powers. The Corporation shall have the following general powers:

(a) to do all such other things and to transact all such business directly or indirectly
necessary, incidental or conducive to the attainment of the purpose of the
corporation; and

(b) Generally, to exercise all powers of a railroad corporation under the Corporation Law

SEC. §. Board of Directors, Composition and Appointment. The corporate powers
of the corporation shall be vested in and exercised by a Board of Directors of not more than
eleven and not less than five members as may be fixed by the President of the Philippines,
consisting of chairman, vice-chairman, and other members appointed by the President of the
Philippines with the consent of the Commission on Appointments. The members of the Board
need not be stockholders of the Corporation, The first members of the Board shall serve as
designated by the President in their appointments for terms of one, two, and three years,
respectively, from the date they qualify an assume office; but their successors shall be
appointed for terms of three, except that any person chosen to fill a vacancy shall serve only for
the unexpired term of the member whom he succeeds. For actual attendance of the meetings,
each such members shall receive a per diem of eight hundred pesos (P800.00).

The Chairman and all the members of the Board must be residents of Mindanao for at
least seven (7) years prior to the appointments.

SEC. 6. Powers and Duties of the Board of Directors. The Board of Directors shall

have the following powers and duties:

(a) To prescribe, amend and repeal, the by-laws, rules and regulations governing the
manner in which the general business of corporation may be exercised, including
provisions for the formation of such committee or committees as the Board of the
Directors may deem necessary to facilitate its business.

(b) To appoint and fix the compensation of the General manager, subject to the approval
of the President of the Philippines, and to appoint and fix the compensation of the
other officers of the Corporation. The Board by a majority vote of all the members
may, for cause, suspend and/or remove the General Manager.

(©) To approve the annual and/or such supplemental budgets of the Corporation which
may be submitted to it by the General Manager from time to time.

SEC. 7 . Suspension and Removal of Directors. Any member of the Board of
Directors may, for cause, be suspended or removed by the President of the Philippines.

2


SEC. 8. Prohibition for Board Members. No Chairman or member of the Board of
Directors of the Corporation shall at the same time serve in the Corporation in any capacity
whatsoever other than as Chairman or member thereof, unless otherwise authorized by the

President of the Philippines or existing law

SEC, 9. Managing Head. The management of the Corporation shall be vested in the
General Manager.

SEC. 10. Powers and Duties of the General Manager. The General Manager shall

have the following powers and duties:

(a) To direct and manage the affairs and business of the Corporation on behalf of the
Board of Directors, and subject to its control and supervision;

(b) To sit in all meetings of the Board of Directors, as Vice-chairman, and participates in
its deliberations, with the right to vote, and to preside any meetings for or in the
absence of the Chairman;

(c) To submit within sixty (60) days after the close of each fiscal year an annual report,
through the Board of Directors, to the office of the President of the Philippines;

(d) To appoint and fix the number and salaries, with the approval of the Board of
Directors, to remove, suspend, or otherwise discipline, for cause, any subordinate
‘employee of the Corporation; and

(e) To perform such other duties as may be assigned to him by the Board of Directors
from time to time.

SEC. 11. Appointment and Promotion. In the appointment and promotion of officers
and employees, merit and efficiency shall serve as basis, and no political test or qualification
shall be prescribed and considered for such appointments or promotions. Said officers and
employees shall be subject to the Civil Service Law, rules and regulations.

SEC. 12. Exemption from Taxes, Duties and Port Charges. The Corporation is
hereby exempt from payment of all taxes of every name and nature - municipal, city, provincial
or national- upon its capital stock, franchises, right of way, eamings, and all other property
owned or operated by it and all duties on all railways materials, supplies and equipment
imported in the Philippines for and/or by the said Corporation and this exemption shall extend to
port charges upon vessels whose entire cargo consist of materials for the construction or
equipment of the Corporation and to such proportion of the prescribed port charges on other
vessels as the tonnage of materials for such constructions or equipment may bear to the
tonnage of the cargo of the vessel.

SEC. 13. Audit Personnel and Report.
(a) Personne! - The Commission on Audit shall appoint a representative who shall be
the Auditor of the Corporation, and the necessary personnel to assist said

a


representative in the performance of his/her duties. The number and salaries of the
Auditor and said personnel shall be determined by the Commission on Audit, subject
to appropriation by the Board of Directors. In case of disagreement, the matter shall
be submitted to the President of the Philippines whose decision shall be final, Said
salaries and all other expenses of maintaining the Auditor's office shall be paid by
the Corporation.

(b) Report - The financial transaction of the Corporation shall be audited in accordance
with law, administrative regulations and the principles and procedures applicable to
commercial corporate transactions. A report of audit for each fiscal year, by the
representative of the Commission on Audit, through the latter, to the Board of
directors of the Corporation, and copies thereof shall be furnished the President of
the Philippines, and the Presiding Officers of the two Houses of Congress. The
report shall set forth the scope of the audit and shall include a statement of assets
and liabilities, capital and surplus or deficit; a statement and surplus or deficit
analysis; statement of income arid expenses; a statement of sources and application
of funds; and such comments and information as may be necessary, together with
such recommendations with respect thereto as may be advisable, including a report
of any impairment of capital noted in the audit. The report also shows specifically any
program, expenditures or other financial transaction or undertaking observed in the
course of audit, which in the opinion of the Auditor, has been carried on or made
without authority of law.

SEC. 14. Legal Counsel. The Corporation shall have its own Legal department, the
chief and members of which shall be appointed by the Board of Directors.

SEC. 15. Exemption from the Land Transportation Commission Act. The
Corporation shall not be subject to the authority and supervision of the Land Transportation
Commission.

SEC. 16. Liquidation. When its term or period of existence has expired in accordance
with the provision of this Act, the Corporation shall nevertheless continue as a body corporate
for three (3) years after the time of its dissolution for the purpose of prosecuting and defending
suits by or against it and of enabling it gradually to settle and close its affairs, to dispose of and
convey its properties, but not for the purpose of continuing the business for which it was
established. In order to carry out its liquidation, upon the dissolution of the Corporation, a Board
of Liquidators shall be appointed by the President to take charge of winding up its corporate
affairs and effecting its liquidation.

SEC. 17. Strikes During National Emergency. The provisions of law to the contrary
notwithstanding, in cases of national emergency, or when in the opinion of the President of the
of the Philippines, the national security or interest is in imminent danger, employees and


laborers of the Corporation shall not strike for the purpose of securing changes or modification
in their terms and conditions of employment during said period of emergency.

SEC. 18. Reversion of General Funds. All funds resulting from dissolution and
liquidation of the Corporation as herein provided shall revert to the general funds of the
Government. .

SEC. 19. Applicability of the Corporation Law. The provisions of the Corporation Law
which are not inconsistent with the provisions of this Act, shall be applicable lo the corporation
created hereby

SEC. 20. Repealing Clause. The provisions of Republic Act No. 4156, as amended,
creating the Philippine National Railways and all acts, executive orders, administrative orders,
and proclamations or parts thereof inconsistent with any of the provision of this Act, are hereby
repealed or modified accordingly.

SEC. 21. Separabilitv Clause. If any part or provision of this Act is declared invalid or
unconstitutional, the remaining parts or provisions not affected thereby, shall remain in full force

and effect,

SEC. 22. Effectivity. This Act shall take effect upon its approval.

Approved,