Republic of the Philippines /.
Congress of the Philippines pare. NOV 26 2019
Metro Manila Time. 4
Eighteenth Congress 9B
First Regular Session % i Ry
5634 <voex ss
House Bill No.” >"

Introduced by Rep. Juan Fidel Felipe F. Nograles
Second District
Province of Rizal

EXPLANATORY NOTE

‘The 1987 Constitution provides for the people’s right to a healthful and balanced
ecology in accordance with the chythm and harmony of nature as declared in Asticle 2,
Section 16 thereof. The goals of national patrimony and economy as enshrined in Art 12
of the 1987 Constitution allows for the exploitation and development of indigenous natural
resources for the benefit of the people subject to certain regulatory controls and limitations
for the greater interest of the nation. ‘These provisions of the Constitution, when
harmonized and properly balanced can help the country in its quest to leapfrog from the
current state and transform to a developed country.

At the forefront of our daily sustenance, utilization of our indigenous resources
and economic development is the longest mountain range in the country, known as
the Sierra Madre Mountain Range. It is located in the eastern side of Luzon is spanning
about 500 kilometers from the province of Cagayan to the north and Quezon to the south
lying along the eastern part of Luzon in the Pacific coast. With the highest peak standing
at a height of 6,069 feet, it has a land area of approximately 1.4 million hectares covering
10 provinces of Cagayan, Isabela, Nueva Vizcaya, Quirino, Nueva Ecija, Aurora, Rizal,
Bulacan, Laguna and Quezon.

‘The continuous forest landscape with remaining tract of old-growth tropical
rainforest represents about 40% of the country’s remaining forest cover. It is considered
and known as the “backbone of Luzon” as the mountain range with its forest cover is a
natural shield and barrier protecting the island of Luzon by attenuating the entry of
typhoons coming from the Pacific Ocean even before reaching the mainland and
protecting the island from storm surges as well. In 2018, the Sierra Madre had stifled what
could have been the world’s strongest storm in 2018. The massive wall of the Sierra
Mountain ranges protected and averted the impacts of devastation to the country of
‘Typhoon Ompong (international code name Mangkhut) in September 2018 as it was able
to lessen the typhoon’s wind speed and protected the communities from the potential
devastation. It was reported that Ompong’s wind slowed down to 160 kilometers per hour
from 220 kph sustained winds after battling the mountains of Sierra Madre with super
typhoon category.

A couple of years back also, Super typhoon Lawin (intemational code name
Haima) and Typhoon Karen (intemational code name Sarika) also hit Northem Luzon and


it was the Sierra Madre mountains that curbed the effects of an imminent disaster From
Category 5, Lawin was brought down to Category 3 after slamming against the
mountainous east coasts of Luzon. ‘The role and importance of the mountain range a
protective barrier against tropical cyclones was unmistakable during the onslaught of these
typhoons.

“The mountain range is also an important center of biodiversity with flora and fauna
species that are unique and endemic to the Philippines. There is no other wilderness in the
country that equals the Sierra Madre. With its vast ranges that stretches from the mountains
to the ocean, the Sierra Madre is home to hundreds of wildlife species and has at least 201
species of mammals, 556 species of birds, over 85 species of amphibians and 252 species
of reptiles, of which 48 percent are endemic. The wildlife includes the Philippine eagle and
golden crowned flying fox which are unique to the Philippines. However, many of these
species are threatened, critical, vulnerable and highly endangered. Hence, laws have been
passed declaring portions of the entire mountain range as Protected Areas.

‘The mountain range encompasses the greatest number of sixty-eight (68) Protected
‘Areas in the country, including national parks, watershed forest reserves, natural
monuments, marine reserves, protected landscapes and seascapes. ‘The country's largest
protected area is the Northern Sierra Madre Natural Park (NSMNP), situated at the
northern part of the range in the province of Isabela and declared and designated as a
natural park under RA 9125 in 2001. However, there are areas in the Sierra Madre
mountain range region that have not been declared as Protected Areas and that may be
explored and used for economic activities and that may contribute to development. While
these areas may be explored and developed, they also need some regulation and safeguards
in place.

‘The Sierra Madre is also home and a sacred ground to many different Indigenous
Peoples (IPs). It is a shared territory by different indigenous peoples in several ancestral
lands in the area. There are eleven (11) IP tribes living on Sierra Madre, namely the Agta
or Dumagat in Nueva Ecija, Nueva Vizcaya, Quitino, Isabela, Aurora and Quezon;
Bungkalot in Nueva Ecija, Nueva Vizcaya, Quirino and Aurora; Isinai in Nueva Ecija,
Nueva Vizcaya and Dupax Norte and Dupax Sur; Gaddang in Nueva Vizcaya, Isabela,
Quirino and Cagayan; Ibanag in Cagayan, Nueva Vizcaya and Isabela; Itawes in Northern
Cagayan; Kalahan in Souther Caraballo and Central Sierra Madre; and Yogad in Isabela.

For the longest time in centuries, the IPs have been the protector of the Sierra
Madre, particularly their ancestral lands, against different forms of threats. By tradition, the
IPs and their communities have been protecting the environment and conserving their
natural resources, which they consider their sacred tribal ground, from land and water, to
the wildlife that thrive within them. These IPs also need protection from any external
interference and exploitation.

“The Sierra Madre is also one of the major drivers of the Philippine economy. Even
if'it is less developed as the mountain ranges are inaccessible from shore, it directly serves
around 10 million people living within and around the Sierra Madre region. ‘The bountiful
resources of the Sierra Madre provide us with food, water, shelter, energy and protection
from typhoons. Its watershed supports the water supply in Central Luzon and Cagayan
Valley, including Metro Manila. The watersheds also provide services that support major
infrastructure, including irrigation dams, water utilities and power plants that supply the
areas including Metro Manila.


‘The communities in the eastern part of the mountain range and along the coast are
so remote that they are only accessible by plane or boat. Despite the difficulty of access to
the region, there are still human activities that threaten the Sierra Madre mountain range
like illegal logging, timber poaching, illegal mining, conversion of forest for agriculture,
migration and human encroachment. Unwarranted infrastructure projects and unregulated
human activities in the area are threats to the Sierra Madre that will cause further forest
degradation, ruin natural parks and protected areas, displace indigenous peoples that result
in widespread slash-and-burn farming or Aaingin. By and large, the lack of implementation
of environmental protection laws vis-i-vis the lack of regulation for human activities in the
area, contribute to the continued forest degradation and dissipation of natural resources.
‘There is absence or lack of an adequate law that will provide ample protection on those
underlying areas outside the declared Protected Areas in the Sierra Mountain region.

Hence, it is necessary that all areas in the Sierra Madre region are clearly delineated
and classified so that human activities are well defined to determine whether these activities
will be disallowed for conservation or allowed in the area for development, subject to the
proper regulatory controls. Those areas in the Sierra Madre region that can be used for
economic activities also need immediate protection and proper regulation in order to
further enhance development and economic growth, so that the general public can reap
the fall benefits of the bountiful resources.

‘Towards this end, there is a need to provide further safeguards and protection and
at the same time develop the underlying areas in the Sierra Madre region that have not
been declared as Protected Areas. It is important that the government strengthen its
campaigns to stop illegal logging and promote forestation, avoid construction of
unwarranted infrastructures, enhance and develop indigenous resources in the areas that
can be utilized for development and providing information/ information dissemination
about the importance of the Sierra Madre in our daily living.

‘This bill, therefore, proposes the creation of a Sierra Made Development
Authority, define its functions and earmark funds for its operations. Through the Sierra
Madre Development Authority, we can further strengthen not only the protection that the
Sierra Madre deserves, but a wholistic approach to enhance development of indigenous
resources in the Sierra Madre region to its fullest potentials for economic development in
order to raise the standard of living of our peole.

“Thus, the immediate enactment of this measure is respectfully requested.

2" District of Rizal Province


5634

AN ACT TO ENHANCE THE PROTECTION AND DEVELOPMENT OF
‘THE SIERRA MADRE REGION, CREATING THE SIERRA MADRE
DEVELOPMENT AUTHORITY FOR THE PURPOSE, DEFINING ITS
POWERS AND FUNCTIONS AND PROVIDING FUNDS THEREFORE,
AND FOR OTHER PURPOSES.

CHAPTER 1
DECLARATION OF POLICY AND CREATION OF AUTHORITY

Section 1. Declaration of Poliy. It is hereby declared to be the policy of Government to
promote, and accelerate the development and balanced growth of the Sierra Madre
mountain region and the surrounding areas within the context of the national and regional
goals and policies for social and economic development and to carry out the development
of the Sierra Madre region with due regard and adequate provisions for environmental
management and protection, preservation of the quality of human life and ecological
systems, and the prevention of undue ecological disturbances, deterioration and illegal
activities.

It is likewise the declared policy of the Government to enhance the benefits to be derived
from the natural and indigenous resources in order to promote the economic and social
development of the region in particular and the country in general.

Section 2. Creation of the Sierra Madre Development Authority. For the purpose of carrying out
and effecting the declared policy, as provided for in Section one hereof, there is hereby
created a government corporation to be known as the Sierra Madre Development
Authority, hereinafter referred to as the Authority, which shall be organized within ninety
(90) days after the approval of this Act.

‘The Authority shall execute the powers and functions herein vested and conferred upon it
in such a manner as will, in its judgment, aid to the fullest possible extent in carrying out
the aims and purposes set forth below. This Act may be known as the Sierra Madre
Protection and Development Act of 2019.

Section 3. Purpose and Functions of the Authority
‘The Authority shall have the following purpose and functions:

(@ To make a comprehensive survey of the physical and natural resources and
potentialities of the Sierra Madre region particularly its social and economic
conditions, hydrologic characteristics, power potentials, scenic and tourist spots,
regional problems, and on the basis thereof, to draft a comprehensive and detailed
plan designed to conserve and utilize optimally the resources within the Sierra
Madre region to promote the region's rapid social and economic development and


upon approval by the National Economic and Development Authority (NEDA)
Board of such plan, to implement the same including projects in line with said
plan: Provided, ‘That implementation of all energy resources development programs
and shall require prior consensus of the Department of Energy to ensure that such
plans and programs are consistent with the national energy programs and
Philippine Development Plan, Provided further, ‘That the areas declared as Protected
Areas under existing laws are subject to the monitoring and supervision of the
Authority.

(b) To provide the machinery for extending the necessary planning, management
and technical assistance to prospective and existing investors in the region;

(©) To make recommendation to the proper agencies on the peso or dollar
financing, technical support, physical assistance and, generally, the level of priority
to be accorded agricultural, industrial and commercial projects, soliciting or
requiring direct help from or through the government or any of its
instrumentalities;

(@ To pass upon and approve or disapprove all plans, programs, and projects
proposed by local government offices/agencies within the region, public
corporations, and private persons or enterprises where such plans, programs
and/or projects are related to those of the Authority for the development of the
region as envisioned in this Act. The Authority shall issue the necessary clearance
for approved proposed plans, programs, and projects within thirty days from
submission thereof unless the proposals are not in consonance with those of the
Authority or that will cause deforestation and any adverse impacts in the
region: Provided, further, That the Authority is hereby empowered to institute
necessary legal proceeding against any person who shall commence to implement
‘or continue implementation of any project, plan or program within the Sierra
Madre Region without previous clearance from the Authority: Provided,
furthermore, That any local government office, agency, public corporation, private
person, or enterprise whose plans, programs and/or projects have been
disapproved by the Authority may appeal the decision of the Authority to the
NEDA within fifteen (15) days from receipt of such disapproval whose decision
on the matter shall be final. Reasonable processing fees as may be fixed by the
Authority's Board of Directors shall be collected by the Authority for the
processing of such plans, programs and/or projects: Provided, finalh, The expansion
plans shall be considered as new plans subject to review of the Authority and to
payment of the processing fees.

‘The Authority and national and local government offices, agencies and public
corporations shall coordinate their plans, programs, projects and licensing
procedures with respect to the Sierra Madre region for the purpose of drawing up
a Sierra Madre region development plan which shall be binding upon all parties
concerned upon approval of the NEDA board.

(© To engage in agriculture, industry, commerce, or other activities within the
region which may be necessary or directly contributory to the socio-economic
development of the region, and, for this purposes, whether by itself or in
cooperation with private persons or 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 or private
enterprises due to consideration of geography, technical or capital requirements,
returns on investment, and risk;

(0) To plan, program finance/or undertake infrastructure projects such as river,
flood and tidal control works, waste water and sewerage works, dams and water
supply, roads, irrigation, housing and related works, when so required within the
context of its development plans and programs including the readjustment,
relocation or settlement of population within the region as may be 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 subject to the approval of the NEDA
Board from users 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 which are
classified, as social overhead capital projects as determined by the NEDA, the
Authority shall be authorized to receive financial assistance from the government
in such amount as may be necessary to carry out the said projects subject to such
terms and condition that may be imposed by the government, upon
recommendation of the NEDA Board: Provided, final, ‘That such amount as may
be necessary for the purpose is hereby authorized to be appropriated out of the
funds of the National Treasury not otherwise appropriated.

(@ To lend or facilitate the extension of financial assistance and/or act as surety or
guarantor to worthwhile agricultural, industrial and commercial enterprises;

(h) To require the cities and municipalities embraced within the region to pass
appropriate zoning ordinances and other regulatory measures necessary to carry
out the objectives of the Authority and enforce the same with the assistance of the
Authority.

@ The provisions of existing laws to the contrary notwithstanding, to exercise
water rights over public waters within the Sierra Madre region whenever necessary
to carry out the Authority's projects;

( Undertake studies on the conservation, improvement, exploration, development
and maintenance of the region, subject to the approval of the NEDA, which the
Authority shall carry out with the assistance and support of all national and local
government units involved in natural resources conservation, exploration and

development.

Section 5. Regulatory Fees. The Authority is hereby empowered to collect annual fees as
provided, for the use of all resources for all beneficial purposes including recreation,
resource extraction, energy development and disposal of all types of wastes purposes. All
the fees so collected shall be used for the management and development of the Sierra
Madre Region, its forest covers and its watershed areas: Provided, That the rates of the fees
to be collected shall be subject to the approval of the President of the Philippines.


CHAPTER II
COPORATE POWERS

Section 6. The Corporate Powers of the Autborip. The Authority shall have the following
powers and functions:

a) To succeed on its corporate name;

b) To sue and be sued in such corporate name;
©) To adopt, alter and use a corporate seal;

4d) To adopt, amend, and repeals its by-laws;

6) To enter into contracts of any kind and description, to enable it to carry out its
purposes and functions under this Act;

) To acquire, buy, purchase, hold or lease, such personal and real property as it
deems necessary or convenient in the transaction of its business and/or in relation
with carrying out its purposes under this Act; and to lease, mortgage, sell, alienate,
or otherwise encumber, utilize, exploit or dispose any such personal and real
property held by it, subject to prior or existing individual or communal right of
private parties or of the government or any agency or enterprise thereof.

g) To exercise the right of eminent domain whenever the Authority deems it
necessary for the attainment of the objectives of the Authority under this Act;

h) To borrow funds from any local or foreign financial institutions independent of
the bonds it may issue or may continue to issue, to carry out the purposes of this
Authority under this Act;

') To purchase, hold, alienate, mortgage, pledge or otherwise dispose of the shares
of the capital stock of, or any bond, securities, or other evidence of indebtedness
created by any other corporation, co-partnership, or government agencies or
instrumentalities; and while the owner of said stock to exercise all the rights or
ownership, including the right to vote thereon; Provided, ‘That the Authority shall
not invest its funds in any highly risky debt instruments issued without recourse to
commercial banks or investment houses as well as in any highly speculative stocks.

j) For carrying on its business, or for the purpose of attaining or furthering 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 now existing or which may
be enacted hereafter.


k) To issue such rules and regulations as may be necessary to effectively carry out
the powers and purposes herein provided including the plans, programs and
projects of the Authority, subject to the approval of the NEDA, the same to take
effect thirty (30) days after publication thereof, in a newspaper of general
circulation.

Section 7. Capitalization and Financing, The Authosity shall have an authorized capital of
One Billion Pesos (P1,000,000,000) which may be fully subscribed by the Republic of the
Philippines; Provided, That an initial operating capital in the amount of One Hundred
Million Pesos (P100,000,000) is hereby authorized to be appropriated out of any funds in
the National Treasury not otherwise appropriated.

Section 8. Operating Expenses. For the operating expenses of the Authority, the sum of One
Hundred Million Pesos (P100,000,000) is hereby appropriated annually for five (5) years
from the general fund of the National Government not otherwise appropriated from the
date of approval of this Act, unless the NEDA may recommend a higher amount.

Section 9. Exemption from tax. The Authority shall be exempt from all taxes, licenses, fees,
and duties, incidental to its operations. This exemption shall extend to its subsidiary
corporation: Prorided, ‘That its subsidiary corporations shall be subject to all said taxes,
licenses, fees, and duties five (5) years after their establishment under a graduated scale as
follows: twenty (20) per centum of all said taxes during the sixth year, forty (40) per centum
of all said taxes during the seventh year, sixty (60) per centum of all said taxes during the
eighth year, eighty (80) per centum of all said taxes during the ninth year, and one hundred
(100) per centum of all taxes during the tenth year, after said establishment. Such
examination shall include any tax ot fee imposed by the government on the sale, purchase
or transfer of foreign exchange. All notes, bonds, debentures and other obligations issued
by the Authority shall be exempt from all taxes both as to principal and interest, except
inheritance and gift taxes.

Section 10. Guarantee by the government. The Republic of the Philippines hereby guarantees
the payment by the Authority of both the principal and the interest of the bonds,
debentures, collaterals, notes or such other obligations issued by the Authority by virtue
of this Act, and shall pay such principal and interest in the event that the Authority fails to
do so. In case the Authority shall be unable to pay the said principal and interest, the
Secretary of Finance shall pay the amount thereof which is hereby appropriated out of any
funds in the National ‘Treasury not otherwise appropriated, and thereupon, to the extent
of the amounts so paid, the Govemment of the Republic of the Philippine shall succeed
to all rights of the holders of such bonds, debentures, collaterals, notes or other obligations,
unless the sum so paid by the Republic of the Philippines shall be refunded by the
Authority within a reasonable time.

Section 11. Subsidiaries. The Authority shall have the power to form, establish, organize
and maintain a subsidiary corporation o comporations. Such subsidiary or subsidiaries shall
be formed in accordance with the Philippine Corporation Law and existing rules and
regulations promulgated by the Securities and Exchange Commission, unless otherwise
provided in this Act. In all cases, the Conversion Authority shall own initially at least fifty-
‘one per centum (51%) of the capital stock of a subsidiary. The Conversion Authority shall
also initially have the majority of the Board of Directors of the subsidiaries, of which at
least one (1) director shall be the chairman of the Conversion Authority and a second
director shall be the president of the Conversion Authority or his designated


representative. Such subsidiaries shall be exempt from the coverage of the Civil Service
Laws, rules and regulations.

CHAPTER II
BOARD OF DIRECTORS

Section 12. Board of Directors: Composition. The corporate powers shall be vested in and
exercised by a Board of Directors, hereinafter referred to as the Board, which shall be
composed of nine (9) members, to wit: the Executive Secretary, the Director General of
the National Economic and Development Authority, the Secretary of Environment and
Natural Resources, the Secretary of Trade and Industry, the Secretary of Energy, the
Chaiperson of the National Commission on Indigenous Peoples, a Provincial Governor
representing the provinces comprising the Sierra Made Region, who shall be designated
and elected by the ten (10) provincial Governors, a City/Municipal Mayor representing the
cities/municipalities comprising the Sierra Madre Region, who shall be designated and
elected by the mayors in the region; the General Manager of the Authority to be appointed
by the President of the Philippines, Provided,’That the Executive Secretary shall be
appointed as the Chairperson and the designated Provincial Governor as Vice
Chairperson. ‘There shall be a Corporate Secretary who shall be appointed the Board of
Directors.

‘The officials next in rank to the above-mentioned member shall serve as permanent
alternate members and shall attend meetings of the Board in the absence of thei principals
and receive the corresponding per diems.

Section 13. Board Meetings. The Board shall meet at least once a month. The Board shall be
presided by the Chairperson or in his/her absence, the Vice-Chairperson.

Section 14. Ouroum; Eifect of vacancies. ‘The majority of the membeers shall constitute a
quorum and the affirmative vote the majority of the members of the Board present shall
be necessary at all times to pass or approve any act or resolution. Vacancies in the Board
as long as there shall be a quorum in attendance, shall not impair the powers of the Board
to execute the functions of the Authority.

Section 15. Per Diems and Allowances. The members of the Board shall receive for every
meeting attended a per diem to be determined by the Board: Provided, That in no case will
the total amount received by each exceed 50% of their basic monthly pay.

Section 16. Powers and Functions of the Board of Directors,

a. To formulate, prescribe, amend and repeal rules and regulations to govern the
conduct of business of the Authority;

b. To appoint and fix the compensation of all officials from division heads and
above, and others of comparable rank including the Senior Deputy General


Manager and six (6) Deputy General Managers upon the recommendation of the
General Manager;

c. By a majority vote of all members of the Board, to suspend, remove or otherwise
discipline for just cause all officials appointed by the Board;

d. To approve the annual and/or supplemental budgets of the Authority; and

¢. To do such other acts and perform such other functions as may be necessary to
carry out the provisions of this Charter.

CHAPTER IV

MANAGEMENT AND PERSONNEL

Section 17. Powers and Functions of the General Manager. ‘The General Manager shall be the
chief executive of the Authority. As such, he/she shall have the following powers and

duties:

a. Submit for consideration of the Board the policies and measures which he
believes to be necessary to carry out the purposes and provisions of this Act;

b. 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 certain of his administrative responsibilities to
other officers of the Authority subject to the rules and regulations of the Board.

d. Appoint officials and employees below the rank of Deputy General Managers
to positions in the approved budget upon written recommendation of the Deputy
General Managers concerned in accordance with Civil Service Rules;

¢. Submit quarterly reports to the Board on personnel selection, placement and
training,

£. Submit to the Office of the President an annual report and such other reports as
may be required, including the details of the annual and supplemental budgets of
the Authority, and

g, Perform such other functions as may be provided by law.

Section 18. Residence. ‘The General Manager shall establish his residence within the region.
‘The General Manager shall not, during his term of office, engage in any business or
profession or calling other than those connected in the performance of his official duties
as General Manager of the Authority.

Section 19. Aatvites of the Authority: Key Offical. In carrying out the acti

ies of the

Authority, the General Manager shall be assisted by a Senior Deputy General Manager


who shall have such powers, duties, and functions that may be delegated to him by the
General Manager, and shall act as General Manager in the absence of or during the
temporary incapacity of and/or until such time as a new General Manager is duly
appointed.

‘The Authority shall have the following departments under the direct supervision and
control of the General Manager;

a. An Administrative Department which shall be responsible for providing services
relating to personnel, training, information, records, supplies general services,
equipment and security;

b. A Legal Department, to be headed by a General Counsel who shall represent
the Authority in legal matters and proceedings. This department shall be
responsible for providing legal advice and assistance on legal matters;

c. A Finance Department which shall be responsible for providing staff advice and
assistance on budgetary and financial matters, and safekeeping of corporate assets;

d. A Project Management Department which shall be responsible for the operation
of approved projects, project evaluation and management improvement matters;

¢. A Planning and Project Development Department which shall be responsible
for providing services relating to planning, programming, statistics and project
development; and

£ An Engineering and ‘Technical Department which shall be responsible for
providing services relating to detailed engineering plans, technical advisory, the
construction operations, and maintenance of project facilities.

‘The business and activities of each of these departments shall be directed by an officer to
be known as Deputy General Managers.

‘The Board may create such other departments, divisions and positions as may be deemed
necessary for the efficient, economical and effective conduct of the activities of the
Authority.

Section 20. Auditing. The Board of Directors shall provide and appoint an Internal
‘Auditor who shall formulate an auditing system for the Authority. The auditor shall make
a semestral and/or annual report covering the financial conditions and operation of the
Authority to the Board. ‘These auditing reports shall contain a statement of the resources
and liabilities, including earnings and expenses, the amount of paid-up capital stock,
surplus, reserves, and profits, as well as losses, bad debts and such other facts which, under
auditing rules and regulations, are considered necessary to accurately described the
financial conditions and operation of the Authority. The auditor shall report and directly
responsible to the Board.

‘The Commission on Audit shall also appoint a representative who shall be the full time
auditor of the Authority, its subsidiaries and such personnel as may be necessary to assist
said representative in the performance of his duties.


Section 21. Compensation, All personnel benefits and compensation shall be subject to the
rules of the Civil Service Commission.

Section 22. Authority of the Governance Commission on GOCC. The Authority shall be under
the general supervision of the Governance Commission on GOCC.

Section 23. Legal Counsel. Without prejudice to the hiring of an outside counsel, the
Government Corporate Counsel shall be the ex-officio legal counsel of Authority.

CHAPTER V
MISCELLANEOUS PROVISIONS

Section 24. Supenision. The Authority shall be under the direct control and supervision of
the President of the Republic of the Philippines for purposes of policy direction and
coordination.

Section 25. Implementing Rules and Regulations. The Office of the President shall promulgate
the Implementing Rules and Regulation with ninety (90) days from the effectivity of this
Act.

Section 26. Separability Clause. If any provision of this Act shall be held unconstitutional
or invalid, the other provisions not otherwise affected shall remain in full force and effect.

Section 27. Repealing Clause. All laws, executive issuances or parts thereof which are
inconsistent herewith are hereby repealed or amended accordingly.

Section 28. Efftvity Clause. This Act shall take effect upon its publication in the Official
Gazette or at least two (2) newspapers of general circulation.