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FOURTEENTH CONGRESS OF THE 
1 
REPUBLIC OF THE PHILIPPINES 
) 
Second Regular Session 
1 
Senate Bill No. 2 5 3 1 
I 
Introduced by Senator Manny Villa 
EXPLANATORY NOTE 
The largest body of inland water on Mindanao is Lake Sultan-Alonto, more 
commonly known as Lake Lanao-which 
lies in the western part of the island. With an 
area of 355 square kilometers, it is the second largest lake in the Philippines. Located in 
the Province of Lanao del Sur, Lake Lanao is counted as one of the 15 ancient lakes in 
the world. It has a maximum depth of 112 meters, and a mean depth of 60.3 meters. 
The lake serves as a reservoir for the generation of hydro-electric power on the 
Agus River. The Lanao Lake and Agus River system generates 70% of the electricity 
used by the people of Mindanao. It likewise supports a major fishery, and is important 
for recreational activities including boating, swimming and sport fishing. 
Lake Lanao is of great limnological interest. The fauna includes many species of 
fishes and invertebrates, which are endemic to the lake. It also supports large numbers of 
waterfowl. 
It is imperative that we ensure the preservation, proper utilization and sustainable 
development of Lake Lanao for the benefit ofthe people of Lanao. 
This proposed measure seeks to respond to this need by creating a centralized 
government agency - the Lake Lanao Development Authority, that would administer and 
implement the over-all developinent of Lake Lanao and its surrounding areas. 
In view of the foregoing, the passage of this bill is earnestly sought. 
n 


FOURTEENTH CONGRESS OF THE 
1 
REPUBLIC OF THE PHILIPPINES 
1 
8 k~i; 12 
‘1 ’, 
Second Regular Session 
1 
/ 
Senate Bill No. 
1. 
~~ 
Introduced by Senator Manny Villar 
AN ACT 
CREATING THE LAKE LANA0 DEVELOPMENT AUTHORITY, DEFINING 
ITS POWERS, FUNCTIONS AND DUTIES, AND FOR OTHER PURPOSES 
Be it enacted by ihe Senate and House of Representatives of the Philippines in Congress 
assembled: 
SECTION 1. Short Titk - This Act shall be known as the “Lake Lanao 
Development Authority Act of 2008”. 
Sec. 2. Declaration of Policy. - It is hereby declared a policy of the State to 
promote and accelerate the development and balanced growth of Lake Lanao and its 
surrounding cities and municipalities, within the context of national plans and policies for 
&stainable development, with due regard and adequate provisions for environmental 
,management and control, preservation of the quality of human life and ecological 
systems, and the prevention of undue ecological disturbances, deterioration and pollution. 
For purposes of this act, the Lake Lanao Development Authority created under 
Section 3 of this Act shall identify the surrounding cities and municipalities, which shall 
be known as the “Area”. 
Sec. 3. Creation of the Lnke Lnnno Development Authority. 
~ 
To effectively 
carry out the declared policy, there is hereby created under the Office of the President of 
the Philippines, a body corporate to be known as the Lake Lanao Development Authority 
hereinafter referred to as the Authority. 
Sec. 4. Powers and Functions of the Authority, - The Authority shall have the 
following purposes and functions: 
(a) To make a comprehensive survey of the physical and natural resources and 
potentialities of Lake Lanao and the Area, particularly its social and economic 
conditions, hydrologic characteristics, power potentials, scenic , and tourist spots, 
conservation of water resources and such other areas of concerns, and on the basis 
thereof, to craft a comprehensive and detailed Lake Lanao Development Plan to 
promote its rapid social and economic development: Provided, That the 
implementation of all fisheries plans and programs of the Authority shall require 
prior consultation with the Bureau of Aquatic Resources to ensure that such plans 
and programs are consistent with national fisheries plans and programs; 
(b) To pass upon and approve all plans, programs and projects proposed by local 
government units, public corporations and private entities that is related to the 
utilization of the resources and the development of Lake Lanao and the Area, and 
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monitor the proper implementation of said plans, programs and projects, 
consistent with the objectives and purposes of this Act. With mandatory prior 
consultation with the Department of Environment and Natural Resources 
(DENR), the Authority shall issue the necessary permit for approved plans, 
programs and projects: Provided, That, any application for permit that has been 
disapproved by the Authority may he appealed to the Office of the President 
within fifteen (1 5) days from receipt of such disapproval, whose decision shall be 
final; 
(c) To harness and promote private participation in business ventures in terms of 
capital expenditures, land, expertise, financing and their facilities for the 
development and growth of the Area; 
(d) To plan, program, finance and/or undertake infrastructure projects such as river, 
flood and tide control works, waster water and sewerage works, water supply, 
roads, pot works, irrigation, housing and related works when so required within 
the context of its development plans and programs, including the readjustment; 
relocation or restoration, or resettlement of population, as may be deemed 
necessary and beneficial by the Authority: Provided, That should any project be 
financed wholly or in part by the Authority, it is hereby authorized to collect 
reasonable fees and tolls as may be fixed by its Board of Directors from users 
and/or beneficiaries thereo€ to recover costs of construction, operation and 
maintenance of the projects: Provided, further, That if the Authority should find it 
necessary to undertake such infrastructure project as social overhead capital 
projects, the Authority shall be authorized to receive financial assistance from the 
government and foreign donors, subject to such terms and conditions that may be 
imposed by the Government; 
(e) To reclaim or cause to be reclaimed portions of Lake Lanao or undertake 
reclamation projects and/or acquire such bodies of land from the Lake which may 
be necessary to accomplish the aims and purposes of the Authority: Provided, 
That the land so reclaimed shall be the property of the Authority and title thereto 
shall be vested in the Authority: Provided, further, That the resulting lakeshore 
area shall continue to be owned by the National Government; 
(f) To establish research centers to undertake studies on the marine and other natural 
resources of Lake Lanao for policy or plan formation and project implementation; 
(g) To exercise exclusive jurisdiction to issue new permit for the use of the lake 
waters for any projects, including navigation, construction, operation of fish pens, 
fish enclosures, fish corral and the like, and to impose necessary safeguard for 
lake quality control and management and to collect necessary fees for said 
activities and projects: Provided, That the Authority's Board may determine new 
areas of fishery development or activities, taking into account the over-all 
development plans and programs for Lake Lanao: Provided, ,further, That the 
Authority shall, subject to the approval of the President of the Philippines, 
promulgate such rules and regulations which shall govern fisheries development 
activities in Lake Lanao, including the advisability of placing the supervision of 
said activities under the Bureau of Fisheries and Aquatic Resources of the local 
government units in the Area; 
(h) To require the cities and municipalities embraced within the area to pass 
appropriate zoning ordinances and regulatory measures to carry out the objectives 
of the Authority and to enforce the same with the assistance of the Authority; 
(i) The provisions of existing laws to the contrary notwithstanding, to exercise water 
rights over public water within the Lake Lanao area whenever necessary to carry 
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out the Authority’s projects; To promulgate and establish, in coordination with the 
Department of Environment and Natural Resources and other existing 
government agencies, water quality standards for industrial, agricultural and 
municipal waste discharges into the Lake and to ensure the cooperation of said 
existing agencies of the Government in enforcing such standards; and 
(i) To undertake studies on the improvement and maintenance of the desirable water 
quality of Lake Lanao, and in pursuance thereof, prepare a water quality 
management program on a continuing basis, which the Authority shall carry out 
with the assistance and support of the national and local government units 
involved in water quality management. 
Sec. 5. Corporate Powers. - The Authority shall exercise the following powers 
and functions: 
(a) To sue and be sued; 
(b) To adopt and use a corporate seal with judicial notice; 
(c) To undertake the programs and projects specified in Section 4 hereof; 
(d) TO engage in agricultural, industrial and commercial or other activities necessary 
or directly contributory to the socio-economic development of the Area, and, for 
this purpose, whether by itself or in cooperation with private entities, to organize, 
finance, invest in, and operate subsidiary corporations: Provided, That the 
Authority shall engage only, unless public interest requires otherwise, in those 
activities as are in the nature of new ventures or are clearly beyond the scope, 
capacity or interest of private enterprises; 
(e) To invest in or otherwise acquire, own, hold, use, operate, sell, assign, transfer, 
exchange, mortgage, pledge, lease, develop or otherwise deal in, real property of 
every kind and description, including shares of stock, bonds, debentures, notes, 
evidence of indebtedness, and other securities; 
(0 To exercise the right of eminent domain or acquire by purchase, privately owned 
land within the area for purposes of implementing projects of the Authority; 
(8) To borrow funds from any local or foreign financial institutions independent of 
the bonds it may issue to carry out the purposes of the authority; 
(h) To acquire, lease, or own such property or assets in whatever form and serve as 
the custodian of such properties or assets, real or movable, and sell or otherwise 
dispose of the same as the Authority may deem it necessary in the pursuit of its 
aims, objectives and purposes; 
(i) To lend or facilitate the extension of financial assistance and/or act as surety or 
guarantor to worthwhile agricultural, industrial and commercial enterprises; 
6 )  To accept grants, donations, gifts, bequests, funds and/or properties in whatever 
form and whatever source in coordination with the appropriate agency and 
administer the same in accordance with the terms thereof, or in the absence of any 
condition, in such manner consistent with the policy, aims and objectives of the 
Authority provided for in this Act; 
(k) To enter into a contract of any kind and description to enable it to carry out its 
purposes and objectives; 
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(1) To issue such rules and regulations as may be necessary to effectively carry out 
the powers and purposes herein provided, including plans, programs and projects 
of the Authority, the same to take effect thirty (30) days after publication thereof, 
in a newspaper of general circulation; and 
(m)For the purposes of attaining or in furtherance of any of its objectives, to perform 
any and all acts which a corporation, co-partnership, or natural person is 
authorized to perform under the laws existing or which may be enacted hereafter. 
See. 6. Capitalization. - The Authority shall have an authorized capital of two 
billion pesos (Php2,000,000,000.00) no par value shares, of which the amount of one 
billion pesos (Php1,000,000,000.00) shall be subscribed by the provinces, cities, and 
municipalities in the Area and at least twenty-five percent (25%) shall be subscribed by 
the National Government. 
Sec. 7. Power to Incur Debts and Issue Bonds. -Whenever the Board of Directors 
may deem it necessary for the Authority to incur an indebtedness or to issue bonds to 
carry out the provisions of this Act, it shall, by resolution, so declare and state the 
purposes for which the proposed,debt is to be incurred. The resolution shall be passed by 
the affirmative vote of at least four (4) members of the Board and approved by the 
President of the Philippines upon the recommendation of the Secretary of Finance in 
consultation with the National Economic Development Authority (NEDA) and the 
Monetary Board. 
See. 8. Tax Exemption. - The Authority shall be exempt from payment of all 
taxes imposed by the National Government, its provinces, cities, municipalities and other 
government agencies and instrumentalities: Pvovided, That, its subsidiary corporations 
shall be subject to all said taxes five (5) years after their establishment under a graduated 
scale. Such exemption shall include any tax or fee imposed by the Government on the 
sale, purchase or transfer of foreign exchange and all notes, bonds, and debentures, and 
other obligations issued by the Authority, both as to the principal and interest. 
Sec. 9. Governing Body. - The corporate powers and functions of the Authority 
shall be vested in and exercised by a Board of Directors, hereinafter referred to as the 
Board, which shall be composed of a Chairman and six (6) members, to be appointed by 
the President of the Philippines who shall serve for a term of six (6) years, unless sooner 
removed from or is incapacitated to perform functions of the office: Provided, That a 
majority of the members of the Board must be residents of Lanao del Sur and Lanao del 
Norte. 
In case of any vacancy in the Board, the same shall be filled by the President of 
the Philippines for the unexpired term. No person shall be appointed as Chairman or 
member of the Board, or as general Manager, unless he is a natural-born citizen of the 
Philippines, at least thirty (30) years of age and of proven probity and integrity. In 
addition, the General Manager shall likewise have demonstrated executive competence 
and experience in the field of public administration or the management of agricultural, 
industrial or commercial enterprises and knowledgeable of the socioeconomic conditions 
of Lake Lanao and its surrounding cities and municipalities 
See. 10. Prolribitioii ngniiist Conflict of Znterest. - No member of the Board shall 
be financially interested, directly or indirectly, in any contract entered into by the 
Authority or in any special privilege granted by the Authority during his term of office. 
All contracts entered into in violation of the provision of this Section shall, by two-thirds 
(2/3) vote of the Board, automatically be disqualified from serving his unexpired term, 
and he shall furthermore be perpetually disqualified for membership in the said Board. 
Sec. 11. Compensation. - The General Manager shall receive compensation in 
accordance with the Compensation and Position Classification Act of 1998 and shall not 
4 


engage in any business, calling or profession during his term of office other than those 
connected with the performance of his official functions and duties. The members of the 
Board shall receive, for every meeting actually attended, a per diem of two thousand 
pesos (Php2,000.00): Pum~ided, That such per diem shall not exceed six thousand pesos 
(l'hp6,000.00) during m y  month for each member. Members of the Board shall be 
reimbursed by the Authority for actual expenses (including traveling and subsistence 
expenses) incurred by them in the performance of their duties for the Authority as may be 
specifically authorized by the Board. 
Sec. 12 Quorum. - The presence of four (4) members of the Board, including the 
Chairman or Vice-chairman, shall constitute a quorum for the transaction of the business 
of the Board. 
Sec. 13. Meetings ofthe Board. - The Board shall meet preferably at its principal 
office at least once a month and as frequently as necessary to discharge its duties and 
responsibilities properly. The Board shall be convened by the Chairman or upon the 
written quest of a majority of its members. Except when otherwise provided for in this 
Act, the vote of a majority of the members constituting a quorum shall be sufficient for 
the adoption of any rule, resolution, decision or any act of the Board. 
Sec. 14. Powers and Functions of the Board. - The Board shall have the 
following powers and functions: 
(a) To formulate, prescribe, amend and repeal rules and regulations to govern the 
conduct of business of the Authority; 
(b) To appoint and fix the compensation of all officials from division heads and 
above, and others of comparable rank, including the Assistant General Manager; 
(c) By a majority vote of all members of the Board, suspend, remove or otherwise 
discipline for just cause all officials appointed by the Board; 
(d) To approve the annual and/or supplemental budgets of the Authority; 
(e) To render annual reports to the President and such special reports as may be 
requested: and 
(f) To do such'other acts and perform such other functions as may be necessary to 
carry out the provisions of this Act. 
Sec. 15. Powers and Functions of the General Manager. - The General Manager 
shall be the chief executive of the Authority, as such, he or she shall have the following 
powers and functions: 
(a) To submit, for the consideration of the Board, the policies and measures which he 
or she believes to be necessary to carry out the purposes and provisions of this 
Act: 
(b) Execute and administer the policies, plans, programs and projects approved by the 
Board; 
(c) Direct and supervise the operation and internal administration of the Authority. 
The General Manager may delegate some of his or her administrative 
responsibilities to other officers of the Authority subject to the rules and 
regulations of the Board; 
(d) Prepare the annual budget of the Authority for the consideration of the Board; 
5 


(e) Prepare the plantilla and appoint officials and employees below the rank of 
division heads to positions in the approved budget upon written recommendations 
of the division head concerned, using as a guide the 'standard set forth and such 
other reports as may be required; 
(0 Exercise such other powers as may be vested in him by the Board. 
Sec. 16. Representation of the Authority. - The General Manager shall be the 
principal representative of the Authority. He shall be empowered, in such capacity and in 
accordance with the instructions of the Board: 
(a) To represent the Authority in all dealings with other offices, agencies, and 
instrumentalities of the Government and will all other persons and entities, 
whether public or private domestic, foreign or international; 
(b) To sign contracts concluded by the Authority, annual reports, balance sheets, 
profit and loss statements, correspondences and other documents of the Authority; 
and 
(c) To represent the Authority, either personally or through counsel, in any legal 
proceedings or actions. 
Sec. 17. Departments. - There shall be created the following departments within 
the authority: the Administrative, Legal, Operations, Financial and Management, 
Auditing, Planning and Programming, and such other departments as may be necessary to 
effectively carry out the functions of the Authority. The head of each Department shall be 
appointed by the Board upon recommendation of the General Manager, and shall receive 
an annual compensation as may be fixed by the Board. 
Sec. 18. Auditing. - The auditing department shall be headed by the duly 
appointed representative of the Commission on Audit whose salary shall be determined 
and paid according to law. All personnel of the auditing department shall be appointed, 
and their number and salaries fixed by the Commission on Audit. 
Sec. 19. Appropriations. - The sum of fifty million pesos (PhP50,000,000.00) 
necessary for the initial operating expenses of the Authority is hereby charged to the 
appropriations authorized for the Regional Development Fund. Thereafter, the sum 
necessary for the continued operation and maintenance of the Authority shall be included 
in the annual budget of the Office of the President. 
See. 20. Repealing Clause. - Ail republic acts, executive orders, rules and other 
issuances, or parts thereof, that are inconsistent with this Act are hereby repealed or 
modified accordingly. 
Sec. 21. Separability Clause. - If for any reason or reasons, any part or provision 
of this Act shall be declared or held to be unconstitutional or invalid other parts or 
provisions hereof, which are not affected thereby shall continue to be in full force and 
effect. 
Sec. 22. Effectivity CIaus,e. - This Act shall take effect fifteen (15) days after its 
publication in the O€ficial Gazette or in at least two (2) national newspapers of' general 
circulation. 
Approved, 
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