FOURTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
1 
First Regular Session 
1 
Introduced by Senator Richard J. Gordon 
EXPLANATORY NOTE 
The State is primarily tasked to promote entrepreneurship and create job 
opportunities through full and efficient use of its resources. Infrastructure assets such as a 
railway system, when developed and optimized effectively and efficiently, and vast idle 
lands nearby, when utilized gainfully to accommodate industrial, agricultural, tourism and 
other enterprises with the direct participation of the local government units and the private 
sector as collective stakeholders, could become an economic engine of growth to 
encourage entrepreneurship and investments and create job and business opportunities. 
The State must be aggressive in promoting and creating opportunities that will bring 
jobs to the people, work to the workers and promote a rising standard of living and an 
improved quality of life for all. With the creation of the Mindanao Railways Corporation that 
shall be tasked to establish a railroad and the transportation system for the whole island of 
Mindanao, the local communities shall be empowered to chart their own destinies and 
ensure local growth and nationwide economic success. 
Mindanao is known as the Land of Promise, yet until the present, the State has failed 
to maximize the potential of the island to contribute to the regional and national economic 
development. The creation of the Mindanao Railways Corporation is a crucial step in the 
State's efforts to fully harness the natural and human resources of Mindanao for the benefit 
of the island's inhabitants and the Filipino people as a whole. 
In view of the foregoing reasons, approval of this bill is earnestly requested. 
p. 
Senator 
GORDON 


FOURTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
1 
First Regular Session 
) 
Introduced by Senator Richard J. Gordon 
AN ACT CREATING THE MINDANAO RAILWAYS CORPORATION, 
PRESCRIBING ITS POWERS, FUNCTIONS AND DUTIES, AND 
PROVIDING FOR THE NECESSARY FUNDS FOR ITS OPERATION 
Be if enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
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SECTION 1. Name, Duration and Domicile. - A corporation to serve as the 
instrumentality of the Government of the Philippines in providing a railroad and the 
transportation system for the whole island of Mindanao is hereby created, to be known 
as the Mindanao Railways Corporation, and hereafter referred to as the Corporation. 
The Corporation shall exist for a term of fifty (50) years from the date of the approval 
of this Act. It shall have its main office in Davao City and shall have such branches 
and agencies within or outside Mindanao as may be necessary for the proper conduct 
of its business. 
Sec. 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, for the purpose of transporting for 
consideration, passengers, mails and property between any point in 
Mindanao. 
(b) 
As an auxiliary to its main purpose, to own andlor 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. 
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Sec. 3. General Powers. - The Corporation shall have the following general 
(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 
Generally, to exercise all powers of a railroad corporation under the 
Corporation Code of the Philippines. 
powers: 
(b) 
Sec. 4. Authorized Capital Stock of the Mindanao Railways Corporation. - 
The Authorized Capital Stock of the Mindanao Railways Corporation shall be One 
Billion Pesos (PhP1,000,000,000.00) divided into Ten Million (PhP10,000,000.00) 
shares at par value shares of One Hundred Pesos each (PhP100.00), which shall be 
fully subscribed by the Philippine Government, twenty percent (20%) of which or Two 
Hundred Million Pesos (PhP200,000,000.00) shall be initially paid-up and the balance 
paid from a continuing annual appropriation of not less than Two Hundred Million 
Pesos (PhP200,000,000.00) which is hereby appropriated out of any funds in the 
National Treasury not otherwise 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 Pesos 
(PhP200,000,000.00) and the programming and release thereof shall remain in force 
until the authorized capital subscribed by the Government shall have been paid in full. 
Sec. 5. Board of Directors, Composition and Appointment. - The corporate 
powers of the Corporation shall be vested in and exercised by a Board of Directors of 
not more than eleven and not less than five members as may be fixed by the 
President of the Philippines, consisting of a chairperson, a vice-chairperson, and other 
members appointed by the President of the Philippines with the consent of the 
Commission on Appointments. The members of the Board need not be stockholders 
of the Corporation. The first members of the Board shall serve as designated by the 
President of the Philippines in their appointments for terms of one, two and three 
years, respectively, from the date they qualify and assume office; but their successors 
shall be appointed for terms of three, except that any person chosen to fill a vacancy 
shall serve only for the unexpired term of whom helshe succeeds. For actual 
attendance at meetings, each member shall receive a per diem of Eight Hundred 
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Pesos (PBOO). The Chairperson and all the members of the Board must be residents 
of Mindanao for at least seven years prior to the appointments. 
Sec. 6. 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 the by-laws and rules and regulations 
governing the manner in which the general business of the Corporation 
may be exercised, including provisions for the formation of such 
committee or committees as the Board of the Directors may deem 
necessary to facilitate its business. 
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 andlor 
remove the General Manager. 
To approve the annual andlor such supplemental budgets of the 
Corporation which may be submitted to it by the General Manager from 
time to time. 
(b) 
(c) 
Sec. 7. 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. 
Sec. 8. Prohibition for Board Members, - No Chairperson 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 Chairperson or member thereof, unless 
otherwise authorized by the President of the Philippines or existing law. 
Sec. 9. Managing Head. - The management of the Corporation shall be 
vested in the General Manager. 
Sec. I O .  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 
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supervision; 
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To sit in all meetings of the Board of Directors, as Vice-chairperson, and 
participate in its deliberations, with the right to vote, and to preside any 
meetings for or in the absence of the Chairperson; 
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; 
To appoint and fix the number and salaries, with the approval of the 
Board of Directors, to remove, suspend, or otherwise discipline, for 
cause, any subordinate employee of the Corporation; and 
To perform such other duties as may be assigned to him by the Board 
of Directors from time to time. 
Sec. 11. Appointment and Promotion. - In the appointment and promotion of 
officers and employees, merit and efficiency shall serve as basis, and no political test 
or qualification shall be prescribed and considered for such appointments or 
promotions. Said officers and employees shall be subject to the Civil Service Law, 
rules and regulations. 
Sec. 12. Exempfion from Taxes, Duties and Port Charges. - The 
Corporation is hereby exempt from payment of all taxes of every name and nature, 
whether municipal, city, provincial or national, upon its capital stock, franchises, right 
of way, earnings, and all other property owned or operated by it and all duties on all 
railways materials, supplies and equipment imported in the Philippines for andlor by 
the said Corporation and this exemption shall extend to port charges upon vessels 
whose entire cargo consist of materials for the construction or equipment of the 
Corporation and to such proportion 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 cargo of the vessel. 
Sec. 13. Audit Personnel and Report. - 
(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 hislher 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. In case of disagreement, the matter shall 
be submitted to the President of the Philippines whose decision shall be final. Said 
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salaries and all other expenses of maintaining the Auditor's office shall be paid by the 
Corporation. 
(b) Report - The financial transaction 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 for each fiscal year, 
by the representative of the Commission on Audit, through the latter, to the Board of 
Directors, and copies thereof shall be furnished the President of the Philippines, 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 arid 
expenses; a statement of sources and application of funds; 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 audit, which in the 
opinion of the Auditor, has been carried on or made without authority of law. 
Sec. 14. Legal Counsel. - The Corporation shall have its own legal 
department, the chief and members of which shall be appointed by the Board of 
Directors. 
Sec. 15. Exempfion from the Land Transpodation Commission Act - The 
Corporation shall not be subject to the authority and'supervision of the Land 
Transportation Commission. 
Sec. 16. 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 of 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 and convey its properties, but not for the purpose of 
continuing the business for which it was established. In order to carry out its 
liquidation, upon the dissolution of the Corporation, a Board of Liquidators shall be 
appointed by the President of the Philippines to take charge of winding up its 
corporate affairs and effecting its liquidation. 
Sec. 17. Strikes During National Emergency. - The provisions of law to the 
contrary notwithstanding, in cases of national emergency, or when in the opinion of 
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the President of the Philippines the national security or interest is in 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. 
Sec. 18. 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. 
Sec. 19. Applicability of the Corporation 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. 
Sec. 20, Repealing Clause. - The provisions of Republic Act No. 4156, as 
amended, creating the Philippine National Railways and all acts, executive orders, 
administrative orders, and proclamations or parts thereof inconsistent with any of the 
provision of this Act, are hereby repealed or modified accordingly. 
Sec. 21. Separability Clause. - If any part or provision of this Act is declared 
invalid or unconstitutional, the remaining parts or provisions not affected thereby, shall 
remain in full force and effect. 
Sec. 22. Repealing Clause. - All laws, decrees, orders, rules and regulations 
or other issuances or parts thereof inconsistent with the provisions of this Act are 
hereby repealed or modified accordingly. 
Sec. 23. Effectivity. -This Act shall take effect upon its approval. 
Approved,