Thirteenth Congress of the Republic 
} 
Of the Philippines 
1 
"04 JjFi 30 
:%.o 
First Regular Session 
1 
S E N A T E  
S. No. 
0 
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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 
orporation. 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 creation of the Mindanao 
Railways Corporation will 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 reasons, approval of this bill is earnestly 
requested. 
EDGARDO J. ANGARA 
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Thirteenth Congress of the Republic 
} 
Of the Philippines 
1 
"0:f 
Jp{ 
\'if3 
:%(? 
First Regular Session 
1 
S E N A  
1 
S. No. 
Introduced by Senator Edgardo J. Angara 
AN ACT 
CREATING THE NIINDANAO RAILWAYS CORPORATION, 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 in 
Congress assembled: 
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: 
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. 
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. 
SEC. 3. Authorized Capital Stock of the Mindanao Railways Corporation. - 
The Authorized Capital Stock of the Mindanao Railways Corporation shall be One 
Billion Pesos (PI ,000,000,000.00) divided into Ten Million (PI 0,000,000.00) shares 
at par value shares of one hundred pesos each (PIOO.OO), which shall be fully 
subscribed by the Philippine Government, twenty percent (20%) of which or Two 
Hundred million pesos (P200,000,000.00) shall be initially paid-up and the balance 
shall be paid from a continuing annual appropriation of not less than two hundred 
million pesos (P200,000,000.00) 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 (P200,000,000.00) and the programming and release 
thereof 
shall remain in force until the authorized capital subscribed by the 
Gdvernment shall have been paid in full. 
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SEC. 4. 
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 railroad corporation under the 
Corporation Law 
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 chairman, vice-chairman, and other 
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members appointed by the President of the Philippines with the consent of the 
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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 in their appointments for terms of one, two, and three 
years, respectively, from the date they qualify an 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 the member whom he 
succeeds. 
For actual attendance of the meetings, each such members shall 
receive a per diem of eight hundred pesos (P800.00). 
The Chairman and all the members of the Board must be residents of 
Mindanao for at least seven (7) 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, amendand repeal, the by-laws, rules and regulations 
governing the manner in which the general business of 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. 
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b) 
To appoi,nt 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 I 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. 
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. 
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SEC. 8. 
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 the President of the Philippines or existing law. 
SEC. 9. 
Managina 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 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 
or in the absence of the Chairman; 
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c) 
To submit within sixty (60) days after the close of each fiscal year an 
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annual report, 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 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. 
SEC. I I. 
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 off,icers and employees shall be subject to the Civil Service Law, 
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rules and regulations. 
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SEC. 
12. 
Exemption from Taxes, Duties and Port CharQes. - 
The 
Corporation is hereby exempt from payment of all taxes of every name and nature - 
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 and/or 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 
I 
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 salaries and all other expenses of 
maintaining the Auditor's office shall be paid by the Corporation. 
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 of 
the Corporation, 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 iegal 
department, the chief and members of which shall be appointed by the Board of 
Directors. 
SEC. 15. Exemption from the Land Transportation Commission Act. - The 
Corporation shall not' be subject to the authority and supervision of the Land 
I 
Transportation Commission. 
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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 (3) 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 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 
contrary notwithstanding, in cases of national emergency, or when in the opinion of 
the President of the 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 lo the corporation created hereby. 
SEC. 20. Repealina Clause. - The provisions of Republic Act No. 4156, as 
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amended, creating the Philippine National Railways and all acts, executive orders, 
administrative orders, qnd proclamations or parts thereof inconsistent with any of the 
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provision of this Act, are hereby repealed or modified accordingly. 
SEC. 21. Separabilitv 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. Effectivity. - This Act shall take effect upon its approval. 
Approved, 
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