Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

FIFTEENTH CONGRESS:
Second Regular Session

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HOUSE BILL NO. 5972

Introduced by Honorable Arthur R. Defensor, Jr.

EXPLANATORY NOTE

As stated in the Constitution, “[tJhe State shall promote industrialization and full
employment x x x through industries that make full and efficient use of human and
natural resources”. The country must pursue a resource based and oriented approach to
development, wherein our resources are not to simply utilized, but maximized to their
full potential.

One resource that the country has in abundance, and may well serve as one of
the cornerstones of economic growth, is metal. This bill is in recognition that the metal
industry should play a vital role in the country’s progress.

Right now, the mining industry is already one of the drivers of the economy.
However, in order to uphold the mandate of the Constitution of full and efficient use of
our resources, there is a need to press on with the development of our metal resources.
‘The development of our metal resources needs to take a further step from the plain
extractive and ore or raw material export orientation of the mining industry.

This bill entitled, “AN CREATING THE PHILIPPINE METAL INDUSTRY
CORPORATION, DEFINING ITS POWERS AND FUNCTIONS, PROVIDING FUNDS
THEREFOR, AND FOR OTHER RELATED PURPOSES”, is renewed government
enterprise intervention in the development of our metal resources. It rests on the policy
that the creation of an organized government corporate entity, or PHILMICO in this bill,
is necessary to assure the full development and maximized utilization of the metal
resources of the country.


PHILMICO shall be the government's corporate arm that shall engage primarily
in metal processing, to ensure the availability of metal products in the country, at
competitive cost. Government enterprise participation through PHILMICO will
generate much needed revenue. The added value to our processed metals will boost our
exports. The accessibility of processed metal in the economy will create a downstream
metal industry to remove our dependence on importation of metal products for our
other industries. A downstream metal industry will generate employment and spur
domestic business activity.

Government should intervene in order to harness the full potential of the metal

industry, and make it a foundation of growth. For this reason, the passage of this bill is
urged.

Al = JR.


Republic of the Philippines ‘
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

FIFTEENTH CONGRESS
Second Regular Session

HOUSE BILL No._5°7

tw

Introduced by Representative Arthur R. Defensor, Jr.

AN ACT
CREATING THE PHILIPPINE METAL INDUSTRY CORPORATION, DEFINING
ITS POWERS AND FUNCTIONS, PROVIDING FUNDS THEREFOR, AND FOR
OTHER RELATED PURPOSES.

Be it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled.

Section 1. Title. This Act shall be known as the "Charter of the Philippine Metal
Industry Corporation.”

Section 2. Declaration of Policy. It is hereby declared to be the policy of the State to
promote the economic progress of the country through the effective development of the
metal industry. Accordingly, the creation of an organized corporate entity is necessary
to assure the full development and maximized utilization of the metal resources of the
country, and the availability at all time or increased supply of metal products at
competitive cost to all users for the accelerated economic growth and industrialization
of the country.

Section 3. Creation, Name, Domicile and Term. To carry out the above policy, there
is hereby created a body corporate to be known as the Philippine National Metal
Industry Corporation, hereafter referred to as the “Corporation."

The principal office of the Corporation shall be determined by its Board of
Directors. It may also establish such offices, branches, agencies or correspondents or
other units in the Philippines or abroad as its business operations may require.

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‘The Corporation shall have a term of fifty years from its creation hereof, which
shall be deemed renewed for an equal period unless sooner dissolved by law.

Section 4. Purposes and Powers. The Corporation shall have the following
purposes and powers;

(a)

(b)

©

(a)

To invest in the metal industry, as well as, in any activity related to metal
resources development, and to set up or form business subsidiaries under
the Batas Pambansa Big. 68, or through the acquisition of the controlling
interests of existing corporations, which may be necessary or contributory
to the economic development of the country, or important in the public
interest, or deemed convenient or incidental to the carrying on of any of
the purposes of the Corporation, or which will promote the well-being of
the Corporation;

To provide and maintain an adequate or increased supply at all times of
metal products at competitive cost for domestic requirements and exports;

To reduce the excessive dependence of the country on imports of metal
products;

To foster conditions of metal product development conducive to a
balanced and sustainable growth of the economy.

Subject to governmental policy, the Corporation shall also have the following
purposes and powers;

(a)

To enter into contracts with any person or entity, domestic or foreign, and
with governments for the undertaking of the varied aspects of the metal
industry, under such terms and conditions at it may deem proper and
reasonable;

To purchase, hold, alienate, mortgage, pledge or otherwise dispose of the
stocks, bonds, and other securities or evidences of indebtedness of any
other corporation, association, firm or entity, domestic or foreign, and,
while the owner of holder thereof, to exercise all the rights and powers of
ownership, including the right to vote thereon for any purpose;

To hold lands and acquire rights over mineral lands as may be necessary
to accomplish its purposes;


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(d)

(2)

(g)

(h)

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(i)

Subject to existing rights, to lease or contract for unappropriated public
waters and foreshore and offshore areas, which, in the decision of the
President of the Philippines, is essential to the exercise of the purposes of
the Corporation, and the same shall be granted to the Corporation by the
proper government agency concerned, under such terms and conditions
as may be mutually agreed upon between them;

To enter into any lawful arrangements for sharing profits, joint venture,
union, interests, reciprocal concession or cooperation, with any person or
corporation, association, partnership, syndicate or entity located in or
organized under the laws of any authority, in any part of the world, in the
carrying on of any business, which the Corporation is authorized to carry
on, or any business or transaction deemed necessary in the carrying on of
any of the purposes of the Corporation;

To acquire assets, real or personal, or interest therein, and encumber or
otherwise dispose of the same, as it may deem proper, and necessary in
the conduct of its business;

To establish and maintain, for its own use, such communication system,
whether by radio, telegraph or any other manner, without the need of a
separate franchise therefor;

To determine its organizational structure, and the number and salaries of
its officers and employees, in accordance with existing laws, rules and
regulations;

To design, write, prepare, publish and display, in any manner,
advertisements, publicity or promotional devices of all kinds for itself or
for others, which are necessary or convenient for the accomplishment of
the purposes of the Corporation;

To exercise the right of eminent domain as may be necessary for the
purposes for which the Corporation is created, subject to existing
provisions of laws; :

Subject to payment of the proper amount, to enter private lands for the
purpose of conducting studies in connection with its purposes, powers
and functions;


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() To acquire easement over public and private lands necessary for the
purpose of carrying out any work essential to its purposes, powers and
functions, subject to payment of reasonable considerations;

(m) Toadopta code of by-laws to complement this Act;

(x) To adopt and use a corporate seal which shall be judicially noticed; to sue
and be sued; and

(0) To perform such corporate acts, and exercise such corporate functions
authorized by the Corporation Law, not inconsistent with this Act, and
such other acts necessary for the attainment of the purposes and objectives
herein specified.

‘The preceding clause shall be construed and interpreted as both purposes and
powers, and the matters expressed in them shall, except as otherwise expressly
provided, but in no wise limited by reference to or inference from the terms of any other
clause, regarded as independent purposes and powers, and the enumeration of specific
purposes and powers shall not be construed to limit or restrict in any manner the
meaning in general terms of the general powers of the Corporation, nor shall the
expression of one thing be deemed to exclude another not expressed, if it be of like
nature.

Section 6. Governing Body. The Corporation shall be governed by a Board of
Directors, hereinafter referred to as the "Board,” which shall be composed of seven (7)
members, namely, the Secretary of Environment and Natural Resources, the Secretary
of Trade and Industry, the Secretary of Finance, the Secretary of Science and
Technology, the Chairman of the Bangko Setral ng Pilipinas, Chairman of the National
Economic Development Authority, or their duly authorized representatives, and the
President of the Corporation.

The President of the Corporation shall be appointed by the President of the
Philippines.

The Secretary of Trade and Industry and the President of the Corporation shall
be the Chairman and Vice-Chairman, respectively, of the Board. In the absence of the
Chairman, the Vice-Chairman shall act as presiding officer of the Board.

The members of the Board shall act as such for the duration of the term of the
Corporation.


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The Board shall formulate the policies, which may be necessary or incidental to
carry out the business of the Corporation, or to the exercise of its express and implied
powers, or for the accomplishment of any of its purposes.

‘The Board shall meet as often and at such dates, times and places as may be
necessary to transact all matters as shall properly come before them, and require their
action as the Board. The meetings of the Board may be called by the President of the
Corporation, or by the Chairman, or by five members of the Board, as and when
necessary. At least five members of the Board shall constitute a quorum and all
decisions of the Board shall require the concurrences of the majority of the quorum.

Section 7. Capital Stock. The Corporation shall have a capital stock divided into
Two Hundred Million shares with a par value of Fifty Pesos each to be subscribed, paid
for and voted as follows:

(a) One Hundred Fifty Million shares shall be originally subscribed and paid
for the Government of the Republic of the Philippines.

(b) The remaining shares of stock may be subscribed and paid for by the
Government of the Republic of the Philippines or by government financial
institutions.

The voting power pertaining to shares of stock subscribed by the Government of
the Republic of the Philippines shall be vested in the President of the Philippines or in
such person or persons as he may designate.

‘The voting power pertaining to shares of stock subscribed by the government
financial institutions shall be vested in them.

Section 8. Powers and Duties of the President. The President, who shall be the chief
executive of the Corporation shall have the following powers and duties;

(a) To prepare the agenda for the meetings of the Board, and to submit for the
consideration of the Board such policies and measures as he believes
necessary to carry out the purpose and objectives of this Act;

(b) To execute, administer and implement the policies and measures
approved by the Board;

(©) To direct and supervise the operation and administration of the
Corporation;


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(4) To appoint and fix the compensation for all the eimployees, except the
officers, of the Corporation;

(e) To represent the Corporation in all dealings with other offices, agencies
and instrumentalities of the government, and with all persons and other
entities, public or private, domestic or foreign; and

(9 To exercise such other powers and perform such other duties provided in
the by-laws and as may be vested in him by the Board.

Section 9. Legal Counsel. The Office of the Government Corporation Counsel shall
be the ex officio legal counsel of the Corporation, and he may designate a representative
for that purpose.

Section 10. Auditor. The Chairman of the Commission on Audit shall appoint a
representative, who shall be the Auditor of the Corporation, and such personnel as may
be necessary to assist said representative in the performance of his duties. The budget of
the office of the Auditor shall be appropriated by the Corporation, subject to the
approval of the Board. Such representative shall render a semestral report on the
financial condition and operations of the Corporation to the Chairman of the
Commission on Audit and the Board. The Chairman of the Commission on Audit shall
submit to the President of the Philippines an annual report covering the financial
conditions and operations of the Corporation. These auditing reports shall contain a
statement of the resources and liabilities including earnings and expenses, reserves and
profits, as well as losses, bad debts and such other facts which, under the auditing rules
and regulations, are considered necessary to accurately describe the financial conditions
and operations of the Corporation; Provided, That before such reports are made, the
Corporation shall be given reasonable opportunity to examine the reports and make
exceptions to any criticisms of the Auditor of the Corporation or the Chairman of the
Commission on Audit, as the case may be, to point out, explain or answer any
inaccuracies therein, if any, and to file a statement which shall be appended by the
Auditor of the Corporation and the Chairman of the Commission on Audit in their
respective reports.

The auditors of the business subsidiaries of the Corporation shall be appointed
by their respective Boards of Directors.

Section 11. Applicability of Civil Service law and Other Laws. The Corporation and
its officers and employees shall be subject to the Civil Service Law, rules and
regulations, as well as to all laws, decrees executive orders, circulars, rules or
regulations pertaining to government-owned or controlled corporations and relating to
government personnel benefits.


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The provisions of the Corporation Law shall apply to the Corporation and its
business subsidiaries insofar as not inconsistent with the provisions of this Act.

Section 12. Loans; Guarantees; Issuance of Bonds. Subject to the provisions of
existing laws, rules and regulations, the Corporation is hereby authorized to contract
loans, credits or any indebtedness from time to time from foreign governments, or any
financial institutions or fund sources or any other entities, foreign or domestic, on such
terms and conditions, as it shall deem appropriate for the accomplishment of its
purposes, and to enter into and execute agreements and other documents specifying the
said terms and conditions, as well as, do or perform any such acts as may be necessary
in connection therewith.

‘The Republic of the Philippines, through the President of the Philippines, or his
duly authorized representative, is empowered to guarantee, absolutely and
unconditionally, as primary obligor and not as surety merely, the payment of the loans,
credits and indebtedness contracted by the Corporation, as herein before provided, in
accordance with Republic Act Numbered Sixty-One Hundred Forty-Two, as amended,
as well as, the performance of all or any of the obligations undertaken by the
Corporation, pursuant to loan agreements entered into with foreign governments or
any international financial institutions or fund sources.

The provisions of any law to the contrary notwithstanding, any financial
institution owned or controlled by the Government of the Republic of the Philippines,
other than the Bangko Sentral ng Pilipinas, the Government Service Insurance System
and the Social Security System, is hereby empowered to guarantee also acceptance
credits, loans, transactions, undertakings, or obligations of any kind which may be
incurred by the Corporation, whether directly or indirectly in favor of any person,
association or entity, whether domestic or foreign.

The Corporation, upon the recommendation of the Secretary of Finance in
consultation with the Monetary Board and with the approval of the President of the
Philippines, is hereby empowered to issue bonds or other securities, which the
President of the Philippines may authorize to be exempt from any or all taxes or to be
guaranteed by the Government, to finance its corporations.

Section 13. Appropriation. The sum of Seven Billion Five Hundred Million Pesos
(P7,500,000,000) is hereby set aside initially and appropriated from the General Funds
not otherwise appropriated, and the same shall be applied to the full payment of the
subscription of the Government of the Republic of the Philippines referred to in Section
7, paragraph (a), of this Decree. Other subsequent requirements shall be contained in
the Appropriations Act. Releases from this appropriation shall be in accordance with a

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schedule to be determined by the Secretary of Finance, subject to the approval of the
President of the Philippines.

Section 14. Transfer of Properties, Rights and Interests. To enable the Corporation to
effectively carry out its purpose and powers under this Decree, the Development Bank
of the Philippines and the Secretary of Finance, the latter acting on behalf of the
Government of the Republic of the Philippines, are hereby directed and authorized to
transfer, assign and convey to the Corporation such properties, rights and/or interests
as may be required by the Corporation in connection therewith, under terms and
conditions to be mutually agreed upon among them.

Section 15. Reports. The Corporation shall, within three months after the end of
every fiscal year, submit its annual report to the President of the Philippines. It shall
likewise submit such periodic or other reports as may be required of its from time to
time.

Section 16. Miscellaneous. All heads of Departments, Agencies, Offices and
instrumentalities of the National Government as well as political subdivisions are
hereby enjoined to extend full cooperation and assistance to the Corporation in the
implementation of the provisions of this Decree.

Section 17. Separability Clause. Should any provision of this Decree be held
unconstitutional, no other provision hereof shall be affected thereby.

Section 18. Repealing Clause. All laws, decrees, executive orders, administrative
orders, rules or regulations inconsistent herewith are hereby repealed, amended or
modified accordingly.

Section 19. Effectivity. This Act shall take effect fifteen days after its publication
in the Official Gazette.

Approved.