FOURTEENTH CONGRESS OF THE REPUBLIC 
) 
8 Ai"R 22 i'_) 
" li 
OF THE PHILIPPINES 
1 
First Regular Session 
1 
S E N A T E  
~~~~~~~~~~~ 
eu : 
S.NO. 2182 
Introduced by Senator Manuel "Lito" M. Lapid 
EXPLANATORY NOTE 
Lake Lanao is the second largest freshwater lake in the Philippines. It is located 
in the Province of Lanao del Sur, at 701.35 meters above sea level. It has an area of 
354.60 square kilometers and a mean depth of 60 meters, with the deepest part at 112 
meters. The basin is shallowest towards the north and gets progressively deeper 
towards the south. The lake is fed by four rivers. Its only outlet is the Agus River, which 
flows southwest into lligan Bay via two channels, one over the Maria Cristina Falls and 
the other over the Linamon Falls. 
The lake is home to 18 endemic species of freshwater fish and supports a large 
number of waterfowl. A hydroelectric plant installed on the Lanao Lake and Agus River 
system generates 70% of the electricity used by the people of Mindanao. Lake Lanao is 
also a major source of livelihood among fisherfolks in the surrounding cities and 
municipalities of the lake. 
Because of its economic benefits and environmental importance to the people of 
Lanao, it is important that we ensure the proper utilization, sustainable development and 
preservation of Lake Lanao. This proposed measure seeks to create a centralized 
governmental agency tasked to oversee and implement the over-all development of 
Lake Lanao and its surrounding areas. 
The Lake Lanao Development Authority shall make and implement a 
comprehensive development plan designed to promote the rapid social and economic 
development of Lake Lanao. The Authority shall be governed by a Board of Directors 
who shall exercise the corporate powers granted under this bill. Moreover, the Authority 
is tasked to establish research centers to undertake studies on the marine and natural 
resources of Lake Lanao for policy or plan formulation. Finally, the Authority shall be 
exempt from taxes imposed by the National Government to allow it to maximize the use 
of its funds for the development of Lake Lanao. 
In view of the foregoing, early passage of this bill is earnestly requ 


FOURTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
1 
First Regular Session 
1 
S E N A T E  
S. No. 
2182 
Introduced by Senator Manuel “Lito” M. Lapid 
AN ACT 
CREATING THE LAKE LANA0 DEVELOPMENT AUTHORITY, DEFINING 
ITS POWERS, FUNCTIONS AND DUTIES, AND FOR OTHER PURPOSES 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Short Title. - This Act shall be known as the “Lake Lanao 
Congress assembled: 
SECTION 1. 
Development Authority Act”. 
SEC. 2. 
Declaration of Policy. - It is hereby declared a policy of the State 
to promote and accelerate the development and balanced growth of Lake Lanao and its 
surrounding cities and municipalities, within the context of national plans and policies for 
sustainable development, with due regard and adequate provisions for environmental 
management and control, preservation of the quality of human life and ecological 
systems, and the prevention of undue ecological disturbances, deterioration and 
pollution. 
For purposes of this act, the Lake Lanao Development Authority created under 
Section 3 of this Act shall identify the surrounding cities and municipalities, which shall 
be known as the “Area”. 
SEC. 3. 
Creation of the Lake Lanao Development Authority. - To 
effectively carry out the declared policy, there is hereby created under the Office of the 
President of the Philippines, a body corporate to be known as the Lake Lanao 
Development Authority hereinafter referred to as the Authority. 
Powers and Functions of the Authority, - The Authority shall 
SEC. 4. 
have the following purposes and functions: 
(a) 
To make a comprehensive survey of the physical and natural resources 
and potentialities of Lake Lanao and the Area, particularly its social and economic 
conditions, hydrologic characteristics, power potentials, scenic , and tourist spots, 
conservation of water resources and such other areas of concerns, and on the basis 
thereof, to craft a comprehensive and detailed Lake Lanao Development Plan to 
promote its rapid social and economic development: Provided, That the implementation 
of all fisheries plans and programs of the Authority shall require prior consultation with 
the Bureau of Aquatic Resources to ensure that such plans and programs are 
consistent with national fisheries plans and programs; 
1 


(b) 
To pass upon and approve all plans, programs and projects proposed by 
local government units, public corporations and private entities that is related to the 
utilization of the resources and the development of Lake Lanao and the Area, and 
monitor the proper implementation of said plans, programs and projects, consistent with 
the objectives and purposes of this Act. With mandatory prior consultation with the 
Department of Environment and Natural Resources (DENR), the Authority shall issue 
the necessary permit for approved plans, programs and projects: Provided, That, any 
application for permit that has been disapproved by the Authority may be appealed to 
the Office of the President within fifteen (15) days from receipt of such disapproval, 
whose decision shall be final; 
(c) 
To harness and promote private participation in business ventures in 
terms of capital expenditures, land, expertise, financing and their facilities for the 
development and growth of the Area; 
(d) 
To plan, program, finance andlor undertake infrastructure projects such as 
river, flood and tide control works, waster water and sewerage works, water supply, 
roads, pot works, irrigation, housing and related works when so required within the 
context of its development plans and programs, including the readjustment; relocation 
or restoration, or resettlement of population, as may be deemed 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 from users andlor 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 project as social 
overhead capital projects, the Authority shall be authorized to receive financial 
assistance from the government and foreign donors, subject to such terms and 
conditions that may be imposed by the Government; 
To reclaim or cause to be reclaimed portions of Lake Lanao or undertake 
reclamation projects andlor acquire such bodies of land from the Lake which may be 
necessary to accomplish the aims and purposes of the Authority: Provided, That the 
land so reclaimed shall be the property of the Authority and title thereto shall be vested 
in the Authority: Provided, further, That the resulting lakeshore area shall continue to be 
owned by the National Government; 
(9 
To establish research centers to undertake studies on the marine and 
other natural resources of Lake Lanao for policy or plan formation and project 
implementation; 
(9) 
To exercise exclusive jurisdiction to issue new permit for the use of the 
lake waters for any projects, including navigation, construction, operation of fish pens, 
fish enclosures, fish corral and the like, and to impose necessary safeguard for lake 
quality control and management and to collect necessary fees for said activities and 
projects: Provided, That the Authority's Board may determine new areas of fishery 
development or activities, taking into account the over-all development plans and 
programs for Lake Lanao: Provided, further, That the Authority shall, subject to the 
approval of the President of the Philippines, promulgate such rules and regulations 
which shall govern 
fisheries development activities in Lake Lanao, including the 
advisability of placing the supervision of said activities under the Bureau of Fisheries 
and Aquatic Resources of the local government units in the Area; 
To require the cities and municipalities embraced within the area to pass 
appropriate zoning ordinances and regulatory measures to carry out the objectives of 
the Authority and to enforce the same with the assistance of the Authority; 
(e) 
(h) 
2 


(i) 
The provisions of existing laws to the contrary notwithstanding, to exercise 
water rights over public water within the Lake Lanao area whenever necessary to carry 
out the Authority’s projects; 
To promulgate and establish, in coordination with the Department of 
Environment and Natural Resources and other existing government agencies, water 
quality standards for industrial, agricultural and municipal waste discharges into the 
Lake and to ensure the cooperation of said existing agencies of the Government in 
enforcing such standards; and 
To undertake studies on the improvement and maintenance of the 
desirable water quality of Lake Lanao, and in pursuance thereof, prepare a water quality 
management program on a continuing basis, which the Authority shall carry out with the 
assistance and support of the national and local government units involved in water 
quality management. 
SEC. 5. 
Corporate Powers. - The Authority shall exercise the following 
powers and functions: 
(j) 
(j) 
a. 
b. 
c. 
d. 
To sue and be sued; 
To adopt and use a corporate seal with judicial notice; 
To undertake the programs and projects specified in Section 4 hereof; 
To engage in agricultural, industrial and commercial or other activities 
necessary or directly contributory to the socio-economic development of the Area, and, 
for this purpose, whether by itself or in cooperation with private 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 of 
private enterprises; 
To invest in or otherwise acquire, own, hold, use, operate, sell, assign, 
transfer, exchange, mortgage, pledge, lease, develop or otherwise deal in, real property 
of every kind and description, including shares of stock, bonds, debentures, notes, 
evidence of indebtedness, and other securities; 
To exercise the right of eminent domain or acquire by purchase, privately 
owned land within the area for purposes of implementing projects of the Authority; 
To borrow funds from any local or foreign financial institutions independent 
of the bonds it may issue to carry out the purposes of the authority; 
To acquire, lease, or own such property or assets in whatever form and 
serve as the custodian of such properties or assets, real or movable, and sell or 
otherwise dispose of the same as the Authority may deem it necessary in the pursuit of 
its aims, objectives and purposes; 
To lend or facilitate the extension of financial assistance and/or act as 
surety or guarantor to worthwhile agricultural, industrial and commercial enterprises; 
To accept grants, donations, gifts, bequests, funds and/or properties in 
whatever form and whatever source in coordination with the appropriate agency and 
administer the same in accordance with the terms thereof, or in the absence of any 
condition, in such manner consistent with the policy, aims and objectives of the 
Authority provided for in this Act; 
To enter into a contract of any kind and description to enable it to carry out 
its purposes and objectives; 
To issue such rules and regulations as may be necessary to effectively 
carry out the powers and purposes herein provided, including plans, programs and 
projects of the Authority, the same to take effect thirty (30) days after publication 
thereof, in a newspaper of general circulation; and 
For the purposes of attaining or in furtherance of 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 existing or which may be enacted hereafter. 
e. 
f. 
g. 
h. 
I. 
I. 
k. 
I. 
m. 
3 


SEC. 6. 
Capita/ization. - The Authority shall have an authorized capital of 
two billion pesos (Php2,000,000.000) no par value shares, of which the amount of one 
billion pesos (Phpl,OOO,OOO,OOO) shall be subscribed by the provinces, cities, and 
municipalities in the Area and at least twenty-five percent (25%) shall be subscribed by 
the National Government. 
Power to lncur Debts and to h u e  Bonds. -Whenever the Board 
of Directors may deem it necessary for the Authority to incur an indebtedness or to 
issue bonds to carry out the provisions of this Act, it shall, by resolution, so declare and 
state the purposes for which the proposed debt is to be incurred. The resolution shall be 
passed by the affirmative vote of at least four (4) members of the Board and approved 
by the President of the Philippines upon the recommendation of the Secretary of 
Finance in consultation with the National Economic Development Authority (NEDA) and 
the Monetary Board. 
SEC. 8. 
Tax Exemption. - The Authority shall be exempt from payment of 
all taxes imposed by the National Government, its provinces, cities, municipalities and 
other government agencies and instrumentalities: Provided, That, its subsidiary 
corporations shall be subject to all said taxes five (5) years after their establishment 
under a graduated scale. Such exemption shall include any tax or fee imposed by the 
Government on the sale, purchase or transfer of foreign exchange and all notes, bonds, 
and debentures, and other obligations issued by the Authority, both as to the principal 
and interest. 
SEC. 7. 
SEC. 9. 
Governing Body. - The corporate powers and functions of the 
Authority shall be vested in and exercised by a Board of Directors, hereinafter referred 
to as the Board, which shall be composed of a Chairman and six (6) members, to be 
appointed by the President of the Philippines who shall serve for a term of six (6) years, 
unless sooner removed from or is incapacitated to perform functions of the office: 
Provided, That a majority of the members of the Board must be residents of Lanao del 
Sur and Lanao del Norte. 
In case of any vacancy in the Board, the same shall be filled by the President of 
the Philippines for the unexpired term. 
No person shall be appointed as Chairman or member of the Board, or as 
general Manager, unless he is a natural-born citizen of the Philippines, at least thirty 
(30) years of age and of proven probity and integrity. In addition, the General Manager 
shall likewise have demonstrated executive competence and experience in the field of 
public administration or the management of agricultural, industrial or commercial 
enterprises and knowledgeable of the socioeconomic conditions of Lake Lanao and its 
surrounding cities and municipalities. 
Prohibition against Conflict of Merest. - No member of the 
Board shall be financially interested, directly or indirectly, in any contract entered into by 
the Authority or in any special privilege granted by the Authority during his term of office. 
All contracts entered into in violation of the provision of this Section shall, by two - thirds 
(213) vote of the Board, automatically be disqualified from serving his unexpired term, 
and he shall furthermore be perpetually disqualified for membership in the said Board. 
SEC. 11. 
Compensation. - 
The 
General 
Manager 
shall 
receive 
compensation in accordance with the Compensation and Position Classification Act of 
1998 and shall not engage in any business, calling or profession during his term of 
office other than those connected with the performance of his official functions and 
duties. 
SEC. 10. 
4 


The members of the Board shall receive, for every meeting actually attended, a 
per diem of two thousand pesos (Php2,OOO): Provided, That such per diem shall not 
exceed six thousand pesos (Php6,OOO) during any month for each member. Members of 
the Board shall be reimbursed by the Authority for actual expenses (including traveling 
and subsistence expenses) incurred by them in the performance of their duties for the 
Authority as may be specifically authorized by the Board. 
Quorum. - The presence of four (4) members of the Board, 
including the Chairman or Vice-chairman, shall constitute a quorum for the transaction 
of the business of the Board. 
Meetings of the Board. - The Board shall meet preferably at its 
principal office at least once a month and as frequently as necessary to discharge its 
duties and responsibilities properly. The Board shall be convened by the Chairman or 
upon the written quest of a majority of its members. Except when otherwise provided for 
in this Act, the vote of a majority of the members constituting a quorum shall be 
sufficient for the adoption of any rule, resolution, decision or any act of the Board. 
Powers and Functions of the Board. - The Board shall have the 
following powers and functions: 
To formulate, prescribe, amend and repeal rules and regulations to govern 
the conduct of business of the Authority; 
To appoint and fix the compensation of all officials from division heads and 
above, and others of comparable rank, including the Assistant General Manager; 
By a majority vote of all members of the Board, suspend, remove or 
otherwise discipline for just cause all officials appointed by the Board; 
To approve the annual and/or supplemental budgets of the Authority; 
To render annual reports to the President and such special reports as may 
be requested; and 
To do such other acts and perform such other functions as may be 
necessary to carry out the provisions of this Act. 
Powers and Functions of the General Manager. - The General 
Manager shall be the chief executive of the Authority, as such, he or she shall have the 
following powers and functions: 
a. 
To submit, for the consideration of the Board, the policies and measures 
which he or she 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; 
c. 
Direct and supervise the operation and internal administration of the 
Authority. The General Manager may delegate some of his or her administrative 
responsibilities to other officers of the Authority subject to the rules and regulations of 
the Board; 
Prepare the annual budget of the Authority for the consideration of the 
Board; 
Prepare the plantilla and appoint officials and employees below the rank of 
division heads, to positions in the approved budget upon written recommendations of 
the division head concerned, using as a guide the standard set forth and such other 
reports as may be required; 
SEC. 12. 
SEC. 13. 
SEC. 14. 
a. 
b. 
c. 
d. 
e. 
f. 
SEC. 15. 
d. 
e. 
f. 
SEC. 16. 
Exercise such other powers as may be vested in him by the Board. 
Representation of the Authority. - The General Manager shall be 
the principal representative of the Authority. He shall be empowered, in such capacity 
and in accordance with the instructions of the Board: 
5 


a. 
To represent the Authority in all dealings with other offices, agencies, and 
instrumentalities of the Government and with all other persons and entities, whether 
public or private domestic, foreign or international; 
b. 
To sign contracts concluded by the Authority, annual reports, balance 
sheets, profit and loss statements, correspondences and other documents of the 
Authority; and 
c. 
To represent the Authority, either personally or through counsel, in any 
legal proceedings or actions. 
Departments. - There shall be created the following departments 
within the authority: the Administrative, Legal, Operations, Financial and Management, 
Auditing, Planning and Programming, and such other department as may be necessary 
to effectively carry out the functions of the Authority. The head of each Department shall 
be appointed by the Board upon recommendation of the General Manager, and shall 
receive an annual compensation as may be fixed by the Board. 
Auditing. - The auditing department shall be headed by the duly 
appointed representative of the Commission on Audit whose salary shall be determined 
and paid according to law. All personnel of the auditing department shall be appointed, 
and their number and salaries fixed by the Commission on Audit. 
Appropriations. - The sum of fifty million pesos (Php50,000,000) 
necessary for the initial operating expenses of the Authority is hereby charged to the 
appropriations authorized for the Regional Development Fund. Thereafter, the sum 
necessary for the continued operation and maintenance of the Authority shall be 
included in the annual budget of the Office of the President. 
Repealing Clause. -All laws, decrees, orders or regulations or part 
Separability Clause. - If any section or provision of this Act is 
declared unconstitutional or invalid, the other parts or provisions which are not affected 
thereby shall continue to be in full force and effect. 
Effectivity Clause. - This Act shall take effect fifteen (15) days 
after its publication in the Official Gazette or in at least two (2) newspapers of general 
circulation. 
SEC. 17. 
SEC. 18. 
SEC. 19. 
SEC. 20. 
thereof inconsistent with this Act are hereby repealed or modified accordingly. 
SEC. 21. 
SEC. 22. 
Approved, 
6