FIFTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENATE 
Senate Bill ~o. 165 
Introduced by SENATOR EDGARDO J. 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, Iligan, 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 cre ation 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 re asons, approval ofthis bill is earnestly requested. 
~/~ 
EDGARDO J. ANGARA 
Senator 


FIFTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
) 
) 
) 
SENATE 
Senate Bill 'No. 165 
Introduced by SENATOR EDGARDO J. 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 the House of Representatives in Congress 
assembled: 
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SECTION 1. Name, Duratiol1 and Domicile. - A corporation to serve as the 
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instrumentality of the Government of the Philippines in providing a railroad and the 
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transportation system for the whole island of Mindanao is hereby created, to be known as 
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the Mindanao Railways Corporation, and hereafter referred to as the Corporation. The 
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Corporation shall exist for a term of fifty (50) years from the date of the approval of this 
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Act. It shall have its main office in Davao City and shall have such branches and agencies 
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within or outside Mindanao as may be necessary for the proper conduct of its business. 
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SEC. 2. Purposes and Specific Powers. - The Corporation shall have the 
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following purposes and specific Powers: 
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(a) To own or operate railroads, tramways, and other kinds ofland transportation, 
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vessels and pipelines, for the purpose of transporting for consideration, 
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passengers, mails and property between any point in Mindanao. 
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(b) As an auxiliary to its main purpose, to own and/or operate powerhouses, 
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hotels, restaurants, terminals, warehouses, timber concessions, coal mines, 
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iron and other mineral properties and to manufacture rolling stocks, 
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equipment, tools and other appliances, to construct and operate in connection 
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with its railroad lines, toll viaducts, toll tunnels and the like. 
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SEC. 3. Authorized Capital Stock o/tlte Mindanao Railways Corporatioll. - The 
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Authorized Capital Stock of the Mindanao Railways Corporation shall be One Billion 
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Pesos (PI,OOO,OOO,OOO.OO) divided into Ten Million (PIO,OOO,OOO.OO) shares at par value 
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shares of one hundred pesos each (P100.00) which shall be fully subscribed by the 
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Philippine Government, twenty percent (20%) of which or Two Hundred million pesos 
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(P200,000,000.00) shall be initially paid-up and the balance shall be paid from a 
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continuing annual appropriation of not less than two hundred million pesos 
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(P200,000,OOO.00) which is hereby appropriated out of any funds in the 
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National Treasury not otherwise appropriated. The said amount shall be programmed and 
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released by the Budget Commission in accordance with the schedule of cash 
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requirements to be prepared and submitted by the Mindanao Railways Corporation. 
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Provided, That this continuing annual appropriation of Two Hundred million pesos 
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(P200,000,000.00) and the programming and release thereof shall remain in force until 
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the authorized capital subscribed by the Government shall have been paid in full. 
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SEC. 4. General Powers. - The Corporation shall have the following general 
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powers: 
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(a) to do all such other things and to transact all such business directly or 
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indirectly necessary, incidental or conducive to the attainment of the purpose 
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of the corporation; and 
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(b) Generally, to exercise all powers of a railroad corporation under the 
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Corporation Law 
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SEC. S. Board of Directors, Composition and Appointment. . The corporate 
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powers of the corporation shall be vested in and exercised by a Board of Directors of not 
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more than eleven and not less than five members as may be fixed by the President of the 
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Philippines, consisting of chairman, vice-chairman, and other members appointed by the 
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President of the Philippines with the consent of the Commission on Appointments. The 
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members of the Board need not be stockholders of the Corporation, The first members of 
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the Board shall serve as designated by the President in their appointments for terms of 
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one, two, and three years, respectively, from the date they qualify an assume office; but 
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their successors shall be appointed for terms of three, except that any person chosen to fill 
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a vacancy shal,l serve only for the unexpired term of the member whom he succeeds. For 
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actual attendance of the meetings, each such members shall receive a per diem of eight 
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hundred pesos (P800.00). 
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The Chairman and all the members of the Board must be residents of Mindanao 
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for at least seven (7) years prior to the appointments. 
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SEC. 6. Powers and Duties of the Board of Directors. - The Board of Directors 
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shall have the following powers and duties: 
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(a) To prescribe, amend and repeal, the by-laws, rules and regulations governing 
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the manner in which the general business of corporation may be exercised, 
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including provisions for the formation of such committee or committees as the 
Board ofthe 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. 
(c) 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. 
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SEC. 7 . Suspension and Removal of Directors. - Any member of the Board of 
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Directors may, for cause, be suspended or removed by the President of the Philippines. 
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SEC. 8. Prohibition for Board Members. - No Chairman or member of the Board 
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of Directors of the Corporation shall at the same time serve in the Corporation in any 
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capacity whatsoever other than as Chairman or member thereof, unless otherwise 
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authorized by the President of the Philippines or existing law. 
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SEC. 9. Managing Read. - The management of the Corporation shall be vested in 
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the General Manager. 
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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 011' in the absence of the Chainnan; 
(c) To submit within sixty (60) days after the close of each fiscal year an annual 
repOlt, 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 rernove, suspend, or otherwise discipline, for cause, any 
subordinate emIlloyee of the Corporation; and 
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(e) To perform such other duties as may be assigned to him by the Board of 
Directors from ~lme to time, 
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SEC. 11. Appointment and Promotion. - In the appointment and promotion of 
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officers and employees, merit and efficiency shall serve as basis, and no political test or 
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qualification shall be prescribed and considered for such appointments or promotions. 
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Said officers and employees shall be subject to the Civil Service Law, rules and 
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regulations. 
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SEC. 12. Exemption from Taxes, Duties and Port Charges. - The Corporation is 
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hereby exempt from payment of all taxes of every name and nature - municipal, city, 
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provincial or national- upon its capital stock, franchises, right of way, earnings, and all 
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other property owned or operated by it and all duties on all railways materials, supplies 
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and equipment imported in the Philippines for and/or by the said Corporation and this 
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exemption shall extend to port charges upon vessels whose entire cargo consist of 
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materials for the construction or equipment of the Corporation and to such proportion of 
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the prescribed port charges on other vessels as the tonnage of materials for such 
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constructions or equipment may bear to the tonnage of the cargo of the vessel. 
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SEC. 13. Audit Pers01tnel and Report. -
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(a) Personnel- The Commission on Audit shall appoint a representative who shall 
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be the Auditor of the Corporation, and the necessary personnel to assist said 
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representative in the perfonnance of his/her duties. The number and salaries of 
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the Auditor and said personnel shall be detennined by the Commission on 
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Audit, subject to appropriation by the Board of Directors. In case of 
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disagreement, the matter shall be submitted to the President of the Philippines 
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whose decision E.hall be final. Said salaries and all other expenses of 
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maintaining the i:uditor's office shall be paid by the Corporation. 
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(b) Report - The financial transaction of the Corporation shall be audited in 
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accordance with law, administrative regulations and the principles and 
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procedures app licable to commercial corporate transactions. A report of audit 
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for each fisc a I year, by the representative of the Commission on Audit, 
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through the la tter, to the Board of directors of the Corporation, and copies 
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thereof shall he furnished the President of the Philippines, and the Presiding 
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Officers of the two Houses of Congress. The report shall set forth the scope of 
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the audit and shall include a statement of assets and liabilities, capital and 
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surplus or duficit; a statement and surplus or deficit analysis; statement of 
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income arid expenses; a statement of sources and application of funds; and 
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such commellts and information as may be necessary, together with such 
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recommendati ons with respect thereto as may be advisable, including a report 
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of any impair ment of capital noted in the audit. The report also shows 
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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 oflaw. 
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SEC. 14. Legal Counsel. - The Corporation shall have its own Legal department, 
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the chief and members of which shall be appointed by the Board of Directors. 
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SEC. 15. Exemption from the Land Transportation Commission Act. - The 
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Corporation shall not be subject to the authority and supervision of the Land 
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Transportation Commission. 
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SEC. 16. Liquidation. - When its term or period of existence has expired in 
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accordance with the provision of this Act, the Corporation shall nevertheless continue as 
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a body corporate for three (3) years after the time of its dissolution for the purpose of 
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prosecuting and defending suits by or against it and of enabling it gradually to settle and 
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close its affairs, to dispose of and convey its properties, but not for the purpose of 
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continuing the business for which it was established. In order to carry out its liquidation, 
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upon the dissolution of the Corporation, a Board of Liquidators shall be appointed by the 
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President to take charge of winding up its corporate affairs and effecting its liquidation. 
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SEC. 17. Strikes During National Emergency. - The provisions of law to the 
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contrary notwithstanding, in cases of national emergency, or when in the opinion of the 
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President of the of the Philippines, the national security or interest is in imminent danger, 
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emp loyees and laborers of the Corporation shall not strike for the purpose of securing 
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changes or modification in their !<0rms and conditions of employment during said period 
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of emergency. 
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SEC. 18. Reversiol1 of General Funds. - All funds resulting from dissolution and 
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liquidation of the Corporahol1 as herein provided shall revert to the general funds of the 
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Government. 
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SEC. 19. Applicmbility of the Corporation Law. -
The provisions of the 
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Corporation Law which ali'e not inconsistent with the provisions of this Act, shall be 
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applicable 10 the corporatio,n created hereby. 
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SEC. 20. Repealing Clause. - The provisions of Republic Act No. 4156, as 
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amended, creating the lPhilippine National Railways and all acts, executive orders, 
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administrative orders" a'nd proclamations or parts thereof inconsistent with any of the 
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provision of this Act, are hereby repealed or modified accordingly. 
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SEC. 21. Separabilitv Clause. - If any part or provision of this Act is declared 
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invalid or unconstitutional, the remaining parts or provisions not affected thereby, shall 
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remain in full force and effect. 
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SEC. 22. Effectivity. - This Act shall take effect upon its approval. 
Approved, 
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