FOURTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
) 
First Regular Session 
) 
Introduced by Senator Richard J. Gordon 
EXPLANATORY NOTE 
Lake Lanao is the largest freshwater lake in Mindanao, and the second 
largest freshwater lake in the Philippines. The rift lake is located in the Province of 
Lanao del Sur at 701.35 meters above sea level. It has an area of 354.60 square 
kilometers and an average depth of 60.3 meters, with the deepest part at 112 
meters. The lake is fed by four rivers, and its only outlet is the Agus River, which 
flows southwest into lligan Bay via two channels, one over the Maria Cristina Falls 
and the other over the Linamon Falls. 
The lake is home to 18 endemic species of freshwater fish and supports a 
large number of waterfowl. Lake Lanao's rich marine resources provide the 
fisherfolks in the surrounding cities and municipalities a major source of livelihood. It 
is important to note as well that a hydroelectric plant installed on the Lanao Lake and 
Agus River system generates 70% of the electricity used by the people of Mindanao. 
It is imperative that we ensure the determined preservation, proper utilization, 
and sustainable development of Lake Lanao for the benefit of the people of Lanao. 
This proposed measure seeks to respond to this need by creating a centralized 
governmental agency tasked to administer and implement the over-all development 
of Lake Lanao and its surrounding areas. 
.
.
 
The Lake Lanao Development Authority 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 shall undertake policy studies on the marine and natural 
resources of the lake through the research centers this bill seeks to establish. 
Finally, the Authority shall be exempt from taxes imposed by the national 
government to allow it to maximize the use of its funds for the development of Lake 
Lanao. 
The passage of this bill is theref 
ught. 
~
A
R
D
 
J. GORDON 
Senator 
/ 


FOURTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
1 
First Regular Session 
1 
. i T V  
f\EGf \VEL> w:." &, 
SENATE 
s. No. 
Introduced by Senator Richard J. Gordon 
AN ACT 
CREATING THE LAKE LANA0 DEVELOPMENT AUTHORITY, DEFINING ITS 
POWERS, FUNCTIONS AND DUTIES, AND FOR OTHER PURPOSES 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
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Authority of 2008". 
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Sec. 2. Declaration of Policy. - It is hereby declared a policy of the State to 
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promote and accelerate the developrnent and balanced growth of Lake Lanao and its 
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surrounding cities and municipalities, within the context of national plans and policies 
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for sustainable development, with due regard and adequate provisions 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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SECTION 1. Title. - This Act shall be known as the "Lake Lanao Development 
For purposes of this act, the L.ake 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 Lake Lanao 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 


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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; 
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 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 be appealed to the Office of the 
President within fifteen (15) days from receipt of such disapproval, 
whose decision shall be final; 
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; 
To plan, program, finance andlor 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 
(b) 
(c) 
(d) 
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(e) 
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(4) 
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(h) 
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and/or beneficiaries thereof 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 projects 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; 
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: 
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; 
To exercise exclusive jurisdiction to issue new permits 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 safeguards 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; 
To require the cities and municipalities embraced within the area to 
pass appropriate zoning ordinances and regulatory measures to carry 
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assistance of the Authority; 
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The provisions of existing laws to the contrary notwithstanding, to 
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exercise water rights over public water within the Lake Lanao area 
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whenever necessary to carry out the Authority's projects; To promulgate 
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and establish, in coordination with the Department of Environment and 
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Natural Resources and other existing government agencies, water 
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quality standards for industrial, agricultural and municipal waste 
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discharges into the Lake and to ensure the cooperation of said existing 
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agencies of the Government in enforcing such standards; and 
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To undertake studies on the improvement and maintenance of the 
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desirable water quality of Lake Lanao, and in pursuance thereof, 
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prepare a water quality management program on a continuing basis, 
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which the Authority shall carry out with the assistance and support of 
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the national and local government units involved in water quality 
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management. 
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and functions: 
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(a) 
To sue and be sued; 
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private enterprises; 
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out the objectives of the Authority and to enforce the same with the 
(i) 
(j) 
Sec. 5. Corporate Powers - The Authority shall exercise the following powers 
(b) 
(c) 
(d) 
To adopt and use a corporate seal with judicial notice; 
To undertake the programs and projects specified in Section 4 hereof; 
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 
(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, 
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bonds, debentures, notes, evidence of indebtedness, and other 
securities; 
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; 
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: 
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; 
To lend or facilitate the extension of financial assistance andlor act as 
surety or guarantor to worthwhile agricultural, industrial and commercial 
enterprises; 
To accept grants, donations, gifts, bequests, funds andlor 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; 
To enter into a contract of any kind and description to enable it to carry 
out its purposes and objectives; 
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 
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. 
Sec. 6. Capitalization. -The Authority shall have an authorized capital of Two 
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Billion Pesos (PhP2,000,000,000.00) no par value shares, of which the amount of One 
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Billion Pesos (PhP~,OOO,OOO,OOO.OO) 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 lncur Debts and to lssue 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. 
Sec. 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: Provided, 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. 
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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 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 
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agricultural, industrial or commercial enterprises and knowledgeable of the 
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socioeconomic conditions of Lake Lanao and its surrounding cities and municipalities. 
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Sec. IO. Prohibition against Conflict of lnferest - No member of the Board 
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shall be financially interested, directly or indirectly, in any contract entered into by the 
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Authority or in any special privilege granted by the Authority during his term of office. 
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All contracts entered into in violation of the provision of this Section shall, by two-thirds 
(213) 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 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): Provided, That, such per diem shall not exceed 
six thousand pesos (PhP6,000.00) during any 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 of the 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 request 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 
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(a) 
To formulate, prescribe, amend and repeal rules and regulations to 
govern the conduct of business of the Authority; 
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To appoint and fix the compensation of all officials from division heads 
and above, and others of comparable rank, including the Assistant 
General Manager; 
By a majority vote of all members of the Board, suspend, remove or 
otherwise discipline for just cause all officials appointed by the Board; 
To approve the annual andlor supplemental budgets of the Authority; 
To render annual reports to the President and such special reports as 
may be requested: and 
e. To do such other acts and perform such other functions as may be 
necessary to carry out the provisions of this Act. 
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Sec. 15. Powers and Functions of fhe 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: 
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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; 
Execute and administer the policies, plans, programs and projects 
approved by the Board; 
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; 
Prepare the annual budget of the Authority for the consideration of the 
Board; 
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; 
Exercise such other powers as may be vested in him by the Board. 
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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: 
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(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; 
To sign contracts concluded by the Authority, annual reports, balance 
sheets, profit and loss statements, correspondences and other 
documents of the Authority; and 
To represent the Authority, either personally or through counsel, in any 
legal proceedings or actions. 
(b) 
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Sec. 17. Deparfments. - 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. Appropriafions. - 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. 
Sec. 20. Repealing Clause. - All 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. Effecfivify Clause. - This Act shall take effect fifteen (15) days after 
its publication in the Official Gazette or in at least two (2) national newspapers of 
general circulation. 
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Approved, 
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