SIXTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
First Regular Session 
SENATE 
S.B. No. 1581 
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Introduced by Senator Manuel "Lito" M. Lapid 
EXPLANATORY NOTE 
Lake Lanao is the second largest freshwater lake in the Philippines. It is located 
in the Province of Lanao del Sur and stands at 701.35 meters above sea level. It has an 
area of 354.60 square kilometers and a mean depth of 60 meters, with the deepest part 
at 112 meters. 
The lake is home to 18 endemic species of freshwater fish and supports a large. 
number of waterfowl. A hydroelectric plant installed on the Lanao Lake and Agus River 
system generates 35% to 40% of the electricity that powers Mindanao. Lake Lanao is 
also a major source of livelihood among fisherfolks in the surrounding cities and 
municipalities of the lake. 
Over the past months, the National power Corporation, the Department of 
Agriculture, and several local communities have expressed concern over the 
deteriorating condition of the lake. Because of its economic benefits and environmental 
importance to the people of Lanao, it is important that we ensure the proper utilization, 
sustainable development and preservation of Lake Lanao. This proposed measure 
seeks to create a centralized governmental agency tasked to oversee and implement 
the over-all development of Lake Lanao and its surrounding areas. 
The proposed measure create$ a Lake Lanao Development Authority that shall 
make and implement a comprehensive development plan designed to. promote the rapid 
social and economic development of Lake Lanao. The Authority shall be governed by a 
Board of Directors who shall exercise the corporate powers granted under this bill. 
Moreover, the Authority is tasked to establish research centers to undertake studies on 
the marine and natural resources of Lake Lanao for policy or plan formulation. Finally, 
the Authority shall be exempt from taxes to allow the optimal use of its funds for the 
development of Lake Lanao. 
In view of the foregoing, early passage of this bill is earnestly requested. 
c;;><O 
MANUELULlTO" M. LAPI9-J 
Senator 
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SIXTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
First Regular Session 
SI:NATE 
1581 
S.No. __ _ 
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Introduced by Senator Manuel "Lito" M. Lapid 
AN ACT 
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SEP -5 P5 :55 
CREATING THE LAKE LANAO DEVELOPMENT AUTHORITY, DEFINING 
ITS POWERS, FUNCTIONS, AND DUTIES, AND APPROPRIATING FUNDS 
THEREFOR 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
1 
SECTION 1. 
Short Title, - This Act shall be known as the "Lake Lanao 
2 
Development Authority Act of 2013". 
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4 
SEC. 2, 
Declaration .of Polir;y. - It is the policy of the State to promote and 
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accelerate the development of Lake Lanao and the local government units (LGUs) in its 
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vicinity, within the context of national plans and policies for sustainable development. In 
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pursuit of this policy, the State shall act with due regard and adequate provision for 
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environmental management and control, preservation of the quality of human life and 
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ecological systems, and the prevention of undue ecological disturbances, deterioration 
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and pollution. 
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SEC. 3. 
Creation of the Lake Lanao Development Authority. - There is 
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hereby created under the Office of the President, a body corporate to be known as the 
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Lake Lanao Development Authority hereinafter referred to as the "Authority". 
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SEC. 3. 
Covered Area. -
The whole area covered by the waters of Lake 
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Lanao as well as the local government units directly surrounding the same, such vicinity 
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to be specifically identified and delineated by the Authority, shall be subject to the 
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provisions of this Act and shall hereafter be referred to as the "Area". 
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SEC. 4. 
Powers and Functions of the Authority. - The Authority shall 
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have the following powers and functions: 
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25 
(a) 
To make a comprehensive survey of the condition and natural of the Area, 
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particularly its social and economic potential, hydrologic characteristics, power 
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generation potential, scenic and tourism value, and such other areas of concerns; 
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(b) 
On the basis of the sUrVey'conducted pursuant to paragraph (a), to craft a 
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comprehensive and detailed Lake Lanao Development Plan to promote rapid social and 
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economic development: Provided, That the implementation of all fisheries plans and 
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programs of the Authority shall require prior consultation with the Bureau of Fisheries 
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and Aquatic Resources to ensure consistency with national fisheries plans and 
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programs; 
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(c) 
To review and oecide on proposals from local government units, public 
2 
corporations, and private entities that relate to the development of the Area and the 
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utilization of its resources; 
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(d) 
To monitor the proper implementation, consistent with the objectives and 
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purpose of this Act of said plans, programs, and projects approved in accordance with 
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the previous paragraph and consistent with the objectives and purposes of this Act; 
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(e) Upon prior consultation with the Department of Environment and Natural 
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Resources (DENR), the Authority shall have the power to issue the necessary permits 
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for approved plans, programs, and projects; 
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(f) 
To promote private participation and business ventures in the form of 
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capital expenditures,' real property, expertise, financing, and facilities for the 
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development and growth of the Area; 
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(g) 
To plan, program, finance, 'or undertake infrastructure projects, such as-
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river, flood, and tide control works, waste water and sewerage works, water supply, 
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roads, pot works, irrigation, housing, and related works, when so required within the 
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context of its development plans and programs, and in accordance therewith, to pursue 
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the readjustment, relocation, restoration, or resettlement of affected populations, if the 
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same shall be deemed necessary and beneficial; 
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(h) 
Should any project be financed wholly or in part by the Authority, it may 
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collect reasonable fees and tolls as may be fixed by its Board of Directors from users 
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and/or beneficiaries to recover costs of construction, operation, and maintenance of the 
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project: Provided, That if the Authority deems it necessary to undertake an infrastructure 
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project as a social overhead capital project, the Authority may receive financial 
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assistance from the government or foreign donors, subject to such terms and conditions 
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as may be imposed by law or regulations; 
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(i) 
To reclaim or cause to be reclaimed portions of Lake -Lanao to acquire 
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such bodies of land adjacent to the Lake which may be necessary to accomplish the 
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aims and purposes of the Authority: Provided, That the land so reclaimed shall be the 
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property of the Authority and title thereto shall be vested in the Authority: Provided, 
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further, That the resulting lakeshore area shall continue to be the property of the State; 
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0) 
To establish research centers for or undertake studies on marine and 
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other natural resources of Lake Lanao for policy or plan formation and project 
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implementation; 
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(k) 
To exercise exclusive jurisdiction over the issuance of new permits for the 
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use of lake waters for any projects, including navigation, construction, operation of fish 
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pens, fish enclosures, fish corral, and the like; to impose necessary safeguards for lake 
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quality control and management; and to collect necessary fees for said activities and 
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projects: Provided, That the Authority's Board may determine new areas of fishery 
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development or activities, taking into account the over-all development plans and 
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programs for Lake Lanao: Provided, further, That the Authority shall, subject to the 
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approval of the President of the Philippines, promulgate rules and regulations to govern 
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fisheries development activities in Lake,l,anao, as well as the advisability of placing the 
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supervision of said activities under the Bureau of Fisheries and Aquatic Resources of 
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the local government units in the Area; 
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(I) 
To require the vicinity covered by the Area to pass appropriate zoning 
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ordinances and regulatory measures to carry out the objectives of the Authority and to 
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enforce the same with the latter's assistance; 
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(m) 
The provisions of existing laws to the contrary notwithstanding, to exercise 
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water rights over Lake Lanao, whenever necessary to carry out the Authority's projects; 
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(n) 
To promulgate and establish, in coordination with the Department of 
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Environment and Natural Resources and other concerned government agencies, water 
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quality standards for industrial, agricultural, and municipal waste discharge into the 
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Lake; 
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(0) 
To ensure the cooperation of concerned agencies of the Government in 
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enforcing water quality standards; and 
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(p) 
To undertake studies on the improvement and maintenance of the 
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desirable water quality of Lake Lanao, and in pursuance thereof, prepare a water quality 
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management program on a continuing basis, which the Authority shall carry out with the 
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assistance and support of the national and local governrnent units involved in water 
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quality management. 
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SEC. 5. 
Corporate Powers. - The Authority shall exercise the following 
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powers and functions: 
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a. 
To sue and be sued; 
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b. 
To adopt and use a corporate seal; 
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c. 
To undertake the programs and projects specified in Section 4 hereof; 
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d. 
To engage in agricultural, industrial, commercial, or such other activities 
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necessary or directly contributory to the socio-economic development of the Area, and, 
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whether by itself or in cooperation with private entities, to organize, finance, invest in, 
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and operate subsidiary corporations for thjs purpose; Provided, That the Authority shall, 
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unless public interest requires otherwise, only engage in activities that are in the nature 
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of new ventures or are clearly beyond the scope, capacity, or interest of private 
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enterprises; 
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e. 
To invest in or otherwise acquire, own, hold, use, operate, sell, assign, 
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transfer, exchange, mortgage, pledge, lease, develop or otherwise deal in real property 
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and securities of any kind and description, including, but not limited to, shares of stock, 
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bonds, debentures, notes, and other such evidence of indebtedness; 
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f. 
To exercise the power of eminent domain or acquireprivately owned land 
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within the Area for the purpose of implementing projects of the Authority; 
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g. 
To borrow funds from any local or foreign financial institutions independent 
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of the bonds it may issue to carry out the purpose of the Authority; 
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h. 
To acquire, lease, or own such property or assets in whatever form and to 
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act as custodian over such properties or assets, real or movable, and to sell or 
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otherwise dispose of the same as the Authority may deem necessary in the pursuit of its 
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aims, objectives, and purposes; 
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i. 
To lend or facilitate the extension of financial assistance to, and/or act as 
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surety or guarantor for worthwhile agricultural, industrial, and commercial enterprises; 
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j. 
To accept grants, donations, gifts, bequests, funds, and/or properties in 
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whatever form and from whatever source, in coordination with appropriate agencies and 
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administer the same in accordance with the terms thereof, or in the absence of any 
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condition, in such manner consistent with the policy, aims, and objectives of the 
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Authority provided for in this Act; 
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k. 
To enter into a contract of any kind and description to enable it to carry out 
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its purposes and objectives; and .". 
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I. 
For the purpose of attaining or in furtherance of any of its objectives, to 
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perform any and all acts which a corporation, partnership, or other juridical person is 
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authorized to perform. 
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SEC. 6. 
Capitalization. - The Authority shall have an authorized capital of 
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Two Billion Pesos (Php2,OOO,OOO,OOO), of which the amount of One Billion Pesos 
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(Php1,000,000,000) shall be subscribed by the provinces, cities, and municipalities in 
2 
the Area and at least twenty-five percent (25%) thereof to be subscribed by the National 
3 
Government. 
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SEC. 7. 
Power to Incur Debts and to Issue Bonds . • Whenever the Board 
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of Directors may deem it necessary for the Authority to incur an indebtedness or to 
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issue bonds to carry out the provisions of this Act, it shall, by resolution, so declare and 
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state the purposes for which the proposed debt is to be incurred. The resolution shall be 
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passed by the affirmative vote of at least four (4) members of the Board and approved 
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by the President of the Philippines, upon the recommendation of the Secretary of 
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Finance in consultation with the National Economic Development Authority (NEDA) and 
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the Monetary Board. 
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SEC. 8. 
Denial of Permit Applications. "- Any application for permit· 
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pursuant to Section 5(e) herein that is disapproved by the Authority may be appealed to 
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the Office of the President within fifteen (15) days from the applicant's receipt of the 
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denial. The decision of the Office of the President shall be final. 
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SEC. 9. 
Tax Exemption . • The Authority shall be exempt from payment of 
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all taxes payable to the National Government or concerned local government units: 
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Provided, That, its subsidiary corporations shall be subject to taxes for the first five (5) 
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years after their establishment. 
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SEC. 10. 
Governing Body . • The corporate powers and functions of the 
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Authority shall be vested in and exercised by a Board of Directors, hereafter referred to 
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as the Board, which shall be composed of a Chairman and six (6) members, to be 
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appointed by the President of the" Philippines and who shall serve for a term of six (6) 
28 
years, unless so(:)ner removed from or incap?citated to perform functions of the office: 
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Provided, That a majority of the members of the Board must be residents of Lanao del 
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Sur and Lanao del Norte. 
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In case of any vacancy in the Board, the same shall be filled by the President of 
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the Philippines for the unexpired term. 
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No person shall be appointed as Chairman or member of the Board, or as 
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General Manager, unless he is a natural-born citizen of the Philippines, at least thirty 
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(30) years of age and of proven probity and integrity. In addition, the General Manager 
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should have demonstrated cbmpetence and experience in the field of publjc 
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administration or the management of agricultural, industrial, or commercial enterprises, 
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and should be knowledgeable of the socioeconomic conditions of the Area. 
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SEC. 11. 
PrOhibition Against Conflict of Interest . • No member of the 
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Board shall be financially interested, directly or indirectly, in any contract entered into by 
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the Authority or in any special privilege granted by the Authority during his term of office. 
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Any member who violates this Section shall, by two - thirds (2/3) vote of the Board, 
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automatically be disqualified from serving his unexpired term, and he shall furthermore 
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be perpetually disqualified from membership in the said Board. 
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SEC. 12. 
Compensation. 
The 
General 
Manager 
shall 
receive 
50 
compensation in accordance with the Compensation and Position Classification Act of 
51 
1998 and shall not engage in any bUSiness, calling, or profession during his term of 
52 
office other than those connected with the performance of his official functions and 
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duties. 
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The members of the Board shall receive, for every meeting actually attended, a 
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per diem of Two Thousand Pesos (Php2,OOO): Provided, That such per diem shall not 
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exceed Six Thousand Pesos (Php6,OOO) per month. Members of the Board shall be 
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reimbursed by the Authority for actual expenses, including travel and subsistence 
2 
expenses, incurred by them in the performance of their duties for the Authority as may 
3 
be specifically authorized by the Board. 
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SEC. 13. 
Quorum.. The presence of four (4) members of the Board, 
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including the Chairman or Vice-chairman, shall constitute a quorum for the transaction 
7 
of business. 
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SEC. 14. 
Meetings of the Board . • The Board shall meet, preferably at its 
10 
principal office, at least once a month and as frequently as necessary to discharge its 
11 
duties and responsibilities. The Board shall be convened by the Chairman or upon the 
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written request of a majority of Its members. Except when otherwise provided for in this 
13 
Act, the vote of a majority of the members constituting a quorum shall be sufficient for 
14 
the adoption of any rule, resolution, deciSion, or act of the Board. 
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SEC. 15. 
Powers and Functions of the Board . • The Board shall have the 
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following powers and functions: 
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a. 
To formulate, prescribe, amend, and repeal rules and regulations to 
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govern the conduct of bUSiness of the Authority; 
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b. 
To appoint and fix the compensation of all officials of the level of division 
21 
head and above, and others of comparable rank, including the ASSistant General 
22 
Manager; 
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c. 
By a majority vote of all members of the Board, suspend, remove, or 
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otherwise discipline officials appointed by the Board, provided that the Same be for just 
2S 
cause; 
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d. 
To approve the annual and/or supplemental budgets of the Authority; 
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e. 
To render annual reports to the President and such special reports as may 
28 
be requested; and 
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f. 
To do suoh other acts and perform such other functions as may be 
30 
necessary to carry out the provisions of tl;lis Act. 
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SEC. 16. 
Powers and Functions of the General Manager . • The General 
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Manager shall be the Chief Executive of the Authority. As such, he or she shall have the 
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following powers and functions: 
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a. 
To submit, for the consideration of the Board, the policies and measures 
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Which he or she believes to be necessary to carry out the purposes and provisions of 
37 
this Act; 
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b. 
Execute and administer the policies, plans, programs, and projects 
39 
approved by the Board; 
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c. 
Direct and supervise the operation and internal administration of the 
41 
Authority. Pursuant thereto, the General Manager may delegate some of his or her 
42 
administrative responsibilities to other officers of the Authority, subject to the rules and 
43 
regulations of the Board; 
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d. 
Prepare the annual budget of the Authority for the consideration of the 
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Board; 
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e. 
Prepare the plantilla and appoint officials and employees below the rank of 
47 
division head to positions in the approved budget upon written recommendations of 
48 
concerned division heads; and 
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f. 
Exercise such other powers as may be vested in him by the Board. 
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SEC. 17. 
Representatlcili ofthe Authority • • the General Manager shall be 
52 
the principal representative of the Authority, and is herebyempowered, in accordance 
53 
with the instructions of the Board: 
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a. 
To represent the Authority in all dealings with other offices, agencies, and 
55 
instrumentalities, whether public or private; 
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b. 
To sign contracts concluded by the Authority, as well as to sign annual 
2 
reports, balance sheets, profit and loss statements, correspondences and other 
3 
documents of the Authority; and 
4 
c. 
To represent the Authority, either personally or through counsel, in any 
5 
legal proceedings or actions. 
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7 
SEC. 18. 
Departments . • There shall be created the following departments 
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within the Authority: Administrative, Legal, Operations, Financial and. Management, _ 
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Auditing, Planning and Programming, and such other department as may be necessary 
10 
to effectively carry out the functions of the Authority. The head of each Department shall 
11 
be appointed by the Board, upon recommendation of the General Manager, and shall 
12 
receive an annual compensation as may be fixed by the Board. 
13 
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SEC. 19. 
Auditing . • The auditing department shall be headed by the duly 
15 
appointed representative of the Commission on Audit whose salary shall be determined 
16 
and paid according to law. All personnel of the auditing department shall be appointed, 
17 
and their number and salaries fixed by the Commission on Audit. 
18 
19 
SEC. 20. 
Implementing Rules and Regulations. - The Authority shall issue 
20 
such rules and regulations as may be necessary to effectively carry out its powers, 
21 
functins, and purposes, as provided in this Act, as well as to carry out plans, programs, 
22 
and projects approved by the Authority pursuant to this Act. Such rules and regulations 
23 
Shall take effect within thirty (30) days from its publication in a newspaper of general 
24 
circulation. 
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26 
SEC. 21. 
Appropriations. - The sum of Fifty Million Pesos (Php50,000,OOO) 
27 
necessary for the initial operating expenses of the Authority is hereby charged to the 
28 
appropriations authorized for the Regi6r\al Development Fund. Thereafter, the sum 
29 
necessary for the continued operation and maintenance of the Authority shall be 
30 
included in the annual budget of the Office of the President. 
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32 
SEC. 22. 
Repealing Clause. - All laws, decrees, orders, rules or regulations 
33 
or part thereof not consistent with this Act are hereby repealed or modified accordingly. 
34 
35 
SEC. 23. 
Separability Clause .• If any section or provision of this Act is 
36 
declared unconstitutional or invalid, the other parts or provisions not affected thereby 
37 
shall continue to be in full force and effect. 
38 
39 
SEC. 24. 
Effectivity Clause . • This Act shall take effect fifteen (15) days 
40 
after its publication in the Official Gazette or in at least two (2) newspapers of general 
41 
circulation. 
Approved, 
6