NINETEENTH CONGRESS
REPUBLIC OF THE PHILIPPINES
Firsf Regular Session
HOUSE OF REPRESENTATIVES
House Bill No.
lntroduced bv Representative Rufus B. Rodriguez
EXPLANATORY NOTE
This bill seeks to create the Mindanao Railways Corporation as a means of hastening
the development of the island.
The experience ofJapan, Canada, the United States and most of Europe shows how
their railroad networks have sped up the national development. ln these nations, railroads
opened up vast land areas, thereby making it possible for tremendous numbers of people to
settle and huge volumes of goods to be transported there at the lowest cost. The influx of
people into areas previously unsettled and the easy availability of goods needed for civilized
life means higher productivity of the land.
A railroad network crisscrossing Mindanao will considerably shorten the distance, for
example, between Zamboanga and Cagayan de Oro or Davao and Cagayan de Oro. Thatwill,
in turn, mean a shortening of the travel time of the people of the goods whose end destination
is the Visayas or Luzon or beyond our northern shores or vice versa.
We must benefit from the experience of other lands whose railway systems up to today
provide people and goods the cheapest and fastest way of moving in volume overland.
Approval of this bill is thus, requested.
RU
B, RO
GUEZ
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July 6, 2022
5:53 pm
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NINETEENTH CONGRESS
REPUBLIC OF THE PHILIPPINES
Firsf Regu/ar Sessrbn
HOUSE OF REPRESENTATIVES
House Bill No.
lntroduced by Representative Rufus B. Rodriguez
AN ACT
CREATING THE MINDANAO RAILWAYS CORPORAT|oN PRESCRIBING ITS POWERS,
FUNCTIONS AND DUTIES, AND PROVIDING FOR THE NECESSARY FUNDS FOR ITS
OPERATION
Be it enacted by the Senate and House of Representatives of the Philippines ln Congress
assembled:
SECTION '1. Name. Duration and Domicile - A Corporation to serve as the instrumentality
of the Govemment of the Philippines in providing a railroad and transportation system for the
whole island of Mindanao is hereby created, to be known as the Mindanao Railways
Corporation, which for purposes of this Act shall be called the Corporation. The Corporation
shall exist for a term of fifty (50) years from the date of approval of this Act. lt shall have its
main office in Cagayan de Oro City and shall have such branches and agencies within or
outside the Philippines as may be necessary for the proper conduct of its business.
SECTION 2. Purposes and Specific Powers. - The Corporation shall have the following
purposes and specific powers.
a) To own or operate railroads, tramways, and other kinds of land transportation,
vessels and pipelines, forthe purpose oftransporting for consideration, passengers, mails and
property between any point in Mindanao; and
b) As an auxiliary to its main purpose, to own and/or operate powerhouses, hotels,
restaurants, terminals, warehouses, timber concessions, coal mines, iron and other mineral
properties and to manufacture rolling stocks, equipment, tools and other appliances, to
construct and operate in connection with its railroad lines, toll viaducts, toll tunnels and the
like.
SECTION 3. General Powers. - The Corporation shall have the following general powers:
a) To do all such other things and to transact all such business directly or indirectly
necessary, incidental or conducive to the attainment of the purpose of the corporation; and
b) Generally, to exercise all powers of a corporation under the Corporation Law.
It shall also have the power of eminent domain.
SECTION 4. Authorized Caoital Stock of the Corporation - The authorized capital stock
of the Corporation shall be One Billion (P1,000,000,000.00) Pesos divided into Ten Million
(10,000,000) shares at par value shares of One Hundred (P100.00) Pesos each, which shall
be fully subscribed by the Philippine Government, twenty percent of which or Two Hundred
Million (P200,000,000.00) Pesos shall be initially paid-up and the balance shall be paid from
a continuing annual appropriation of not less than Two Hundred Million (P200,000,000.00)
Pesos which is hereby appropriated, out of any funds in the National Treasury not otheruise
appropriated. The said amount shall be programmed and released by the Budget Commission
in accordance with the schedule of cash requirements to be prepared and submitted by the
Mindanao Railways Corporation; Provided, that this continuing annual appropriation of Two
Hundred Million (P200,000,000.00) Pesos and the programming and release thereof shall
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remain in force until the authorized capital subscribed by the Government shall have been
paid in full.
sEcrloN 5. Loans. - The corporation is hereby authorized to contract loans, credits and
indebtedness in any domestic or convertible foreign cunency, or capital goods, from foreign
governments, their agencies, instrumentalities or financial institutions, or any non-
governmental national or international financial institutions or firms extending suppliers credit
deferred payment arrangement or other fund sources, or to issue bonds, the total outstanding
amount of which, exclusive of interests, shall not exceed Five Hundred Million
($500,000,000.00) United States dollars or the equivalent thereof in other currencies; on such
terms and conditions as it shall deem appropriate for the accomplishment of its purpose and
to enter into and execute documents and other documents specifying such terms and
conditions.
The President of the Philippines, through the Secretary of Finance, is hereby
authorized to guarantee, absolutely and unconditionally as primary obligor and not as surety
merely, in the name and on behalf of the Republic of the Philippines, the payment of the {oans,
credits, indebtedness and bond issued up to the amount herein authorized which shall be over
and above the amount which the President of the Philippines is authorized to guarantee under
Republic Act Numbered Sixty-One Hundred and Forty-Two as amended, as well as the
performance of all or any of the obligations undertaken by the Corporation in the territory of
the Republic of the Philippines pursuant to loan agreements entered into with foreign
governments or any intemational financial institutions or fund sources.
The loans, credits and indebtedness contracted underthis section and the payment of
the principal, interest and other charges thereon, as well as the importation of machinery,
equipment, materials, supplies and services, by the Corporation, paid from the proceeds of
any loan, credit or indebtedness incurred under this Act, shall also be exempted from all
charges and restrictions previously and presently imposed and to be imposed by the Republic
of the Philippines, or any of its agencies and political subdivisions.
SECTION 6. Board of Directors. Composition and Appointnent. - The corporate powers
of the Corporation shall be vested in and exercised by the Board of Directors consisting of a
chairman, vice-chairman and nine members who shall be appointed by the President of the
Philippines with the consent of the Commission on Appoinlments. The members of the Board
shall serve as designated by the President in their appointments for terms of six years from
the date they qualify and assume office except that any person chosen to fill a vacancy shall
serve only for the unexpired term of the member whom he succeeds. For actual attendance
of Board Meetings, each such members shall receive a per diem of One Thousand
(P1,000.00) Pesos. The Board meetings may not exceed four times a month.
SECTION 7 . Qualifications of Officials. - The Chairman , Vice-Chairman, members of the
Board of Directors and the General Manager of the Corporation shall be Filipino citizens, at
least 35 years of age at the time of their appointments and holders of degrees in the field of
engineering, economics, business management and related courses. ln addition, a masteral
degree in the same field and/or experience in railway management and operations for at least
five (5) years is preferable. All such officials must be residents of Mindanao for at least five (5)
years prior to the appointments.
SECTION 8. Powers and Duties of the Board of Directors. - The Board of Directors shall
have the following powers and duties:
a) To prescribe, amend and repeal by laws, rules and regulations governing the
manner in which the general business and corporation may be exercised, including provisions
for the formation of such committee or committees as the Board of 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 compensition of the
other officers of the corporation. The Board by a majority vote of all members may, for cause,
suspend and/or remove the General Manager.
c) To approve, the annual and/or such supplemental budgets of the Corporations
which may be submitted to it by the General Manager from time to time.
SECTION 9. Suspension and Removal of Directors. - Any member of the Board of
Directors may for cause be suspended or removed by the President of the Philippines.
SECTION 10. Prohibition for Board Members - No Chairman or member of the Board of
Directors of the Corporation shall at the same time serve in the Corporation in any capacity
whatsoever other than as Chairman or member thereof, unless otherwise authorized by law.
SECTION 11 . Manaqinq Head. - The management of the Corporation shall be vested in the
General Manager.
SECTION 12. Powers and Duties of the General Manaqer. - 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 participate
in its deliberations, with the right to vote, and to preside any meetings for or in the absence of
the Chairman;
c) To submit within sixty (60) days after the close of each fiscal year an annual report,
through the Board of Directors, to the Office of the President of the Philippines and to the
Congress of the Philippines;
d) To appoint and fix the number and the salaries, with the approval of the Board of
Directors of such subordinate personnel as may be necessary for the proper discharge of the
duties and functions of the Corporation, and with the approval of the Board of Directors, to
remove, suspend, or otherwise discipline, for cause, any subordinate employee of the
Corporation; and
e) To perform such other duties as may be assigned to him by the Board of Directors
from time to time.
SECTION 13. Appointment and Promotion of PersonneL - ln the appointment and
promotion of officers and employees of the MRC merit and efficiency shall serve as basis, and
no political test or qualification shall be prescribed and considered for such appointments or
promotions.
SECTION 14. Exemption from Taxes, Duties and Pott Chardes. - The Corporation is
hereby exempt from payment of all taxes of every name and nature - muniopal, city,
provincial, or national - upon its capital stock, franchises, right of way, earnrngs, and all other
property owned or operated by it and all duties on all railways materials, supplies and
equipment imported in the Philippines for and/or by the said Corporation and this exemption
shall extend to port charges upon vessels whose entire cargo consists of materials for the
construction of the prescribed port charges on other vessels as the tonnage of materials for
such constructions or equipment may bear to the tonnage of the entire cargo of the vessel.
a) Personnel - The Commission on Audit shall appoint a representative who shall be
the Auditor of the Corporation, and the necessary personnel to assist said representative in
the performance of his duties. The number and salaries of the Auditor and said personnel shall
be determined by the Commission on Audit, subject to appropriation by the Board of Directors.
SECTION 15. Audit Personnel and Report. -


ln case of disagreement, the matter shall be submitted to the President of the Philippines
whose decision shall be final. Said salaries and all other expenses of maintaining the Auditor's
office shall be paid by the Corporation.
b) Report - The financial transactions of the Corporation shall be audited in
accordance with law, administrative regulations and the principles and procedures applicable
to commercial corporate transactions. A report of audit of each fiscal year, by the
representative of the Commission on Audit, through the latter, to be Board of Directors of the
Corporation, and copies thereof shall be furnished the President of the Philippines, the
Secretary of Transportation and Communications and the Presiding Officers of the two Houses
of Congress. The report shall set forth the scope of the audit and shall include a statement of
assets and liabilities, capital and surplus or deficit; a statement and surplus or deficit analysis;
statement of income and expenses; a statement of sources and application offunds; and such
comments and information as may be necessary, together with such recommendations with
respect thereto as may be advisable, including a report of any impairment of capital noted in
the audit. The report also shows specifically any program, expenditures or other financial
transaction or undertaking observed in the course of the audit, which in the opinion of the
Auditor, has been carried on or made without authority of law.
SECTION 16. Leqal Counsel. - The Corporation shall have its own legal department, the
chief and members of which shall be appointed by the Board of Directors.
SECTION 17. Exemotion frcm the Land Transpodation Commission Act - The
Corporation shall not be subject to the authority and supervision of the Land Transportation
Commission.
SECTION 18. Liquidation - When its term or period of existence has expired in accordance
with the provision of this Act. The Corporation shall nevertheless, continue as a body corporate
for three years after the time o its dissolution for the purpose of prosecuting and defending
suits by or against it and of enabling it gradually to settle and close its affairs, to dispose of
any convey its properties, but not for the purpose of continuing the business for which it was
establlshed- In order to carry out its liquidation, upon the dissolution of the Corporation, a
Board of Liquidators shall be appointed by the President to take charge of winding up its
corporate affairs and effecting its liquidation.
SECTION 19. Strikes durinq National Emerqencv. - The provisions of law to the contrary
notwithstanding, in cases of national emergency, or when in the opinion of the President of
the Philippines, the national security or interest in its imminent danger, employees and
laborers of the corporation shall not strike for the purpose of securing changes or modification
in their terms and conditions of employment during said period of emergency.
SECTION 20. Reversion of General Funds. - All funds resulting from dissolution and
liquidation of the Corporation as herein provided shall revert to the general funds of the
Government.
SECTION 21. Applicabilitv of the CorDoration Law. - The provisions of the Corporation
Law which are not inconsistent with the provisions of this Act shall be applicable to the
corporation created hereby.
SECTION 22. Repeal or Modifications. - fhe provisions of Republic Act No. 4156, as
amended, creating the Philippine National Railways and all Acts, Executive Orders, and
Proclamations or parts thereof inconsistent with any of the provisions of this Act, are hereby
repealed or modified accordingly.


SECTION 23. Separabilifrr Clause. - ln the event any provision of this act or the application
of such provision to any person or circumstances is declared unconstitutional, the remainder
of this Act or the application of said provision to other persons or circumstances shall not be
affected thereby.
SECTION 24. Effectivitv. - This Act shall take effect upon its approval.
Approved,