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THIRTEENTH CONGRESS OF THE REPUBLI 
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OF THE PHILIPPINES 
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First Regular Session 
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S E N A T E  
S. No. 
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Introduced by Senator S. R. OsmeAa Ill 
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EXPLANATORY NOTE 
The island of Mindanao, with a land area second only to Luzon has been 
called the land of promise. Yet, sheer neglect owing partly to its distance from 
the national capital has led to economic backwardness and disenchantment 
among its populace, as dramatized by numerous uprisings from among the 
different ethnic groups of the island. 
Today, Mindanao faces numerous exciting possibilities. As part of the 
Brunei-Indonesia-Malaysia-Philippines East Asian Growth Area (BIMP-EAGA), it 
stands to gain from an influx of investments and trade creation within the growth 
area, The island's agriculture, especially in Davao and Zamboanga, spared 
from the vicissitudes of the seasonal monsoon that ravages the rest of the 
country, is a rich potential that should be tapped for economic development. 
This bill 
seeks to establish the Mindanao 
Railways Corporation, 
mandated to provide railroad transportation to provide links among the key 
centers of the entire island such as Davao City, Iligan, 
Cagayan de Oro, 
Zamboanga City, Cotabato City, Marawi, Pagadian, Ozamiz, Surigao, Butuan, 
Bislig, Mati. Digos, Malaybalay and Dipolog. With indications of economic activity 
starting to pick up in these 
the government's investment in such 
infrastructure will yield rich returns, not only in terms of financial gains, but 
also in promoting a more cohesive culture and community spirit among the 
Mindanao residents. 
centers, 
A critical key in Mindanao's development is the establishment of physical 
links between its many regions to spur the growth 
of trade and commerce. 
Roads, river transport, 
airports, 
and seaports must be established. And 
arguably, a crucial component is a railroad system. 
In view of the foregoing, early passage of this bill is earnestly requested. 
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SERGIO OSM€NA 111 
Senator 


THIRTEENTH CONGRESS 
F THE REPUBLI 
a x \  ' 
"3- 
First Regular Session 
LG 
WLJ * Ju i'z ?5y 
OF THE PHILIPPINE 
S E N A T  
S. No. 
Introduced by Senator S. R. Osmeiia 111 
AN ACT 
CREATING THE MINDANAO 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: 
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SECTION 1. Name, Duration and Domicile - A Corporation to serve as 
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the instrumentality of the government of the Philippines in providing a railroad and 
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transportation system for the whole island of Mindanao is hereby created, to be 
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known as the Mindanao Railways Corporation. The Corporation shall exist for a 
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term of fifty (50) years from the date of the approval of this Act. It shall have its 
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main office in Davao City and shall have such branches and agencies within or 
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outside Mindanao as may be necessary for the proper conduct of its business. 
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SECTION 2. Purposes and Specific Powers. - The Corporation shall 
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have the following purposes and specific powers: 
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a) To own or operate railroads, tramways, and 
other kinds of land 
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transportation, vessels and pipelines, for the purpose of transporting 
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Mindanao; 
for consideration, passengers, mails and property between any point in 
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b) As an auxiliary to its main purpose, to own and/or operate 
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powerhouses, hotels, restaurants, terminals, warehouses, timber 
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concessions, coal mines, iron and other mineral properties and to 
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manufacture rolling stocks, equipment,, tools and other appliance$, to 
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SECTION 3. Authorize 
Mindana o Railways 
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Corporation. - The Authorized Capital Stock of the Mindanao Railways 
construct and operate in connection with its railroad lines, toll viaducts, 
toll tunnels and the like. 
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Corporation shall be One billion pesos (PI ,000,000,000.00) divided into Ten 
Million Pesos (@10,000,000.00) shares at par value shares of One Hundred 
Pesos (P100.00) each, 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 
(~200,000,000.00) 
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 o'f 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 Government shall 
have been paid in full. 
SECTION 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. 
SECTION 5. Board of Directors, Composition and Appointment. - The 
corporate powers of the corporation shall be vested in and exercised by a Board 
of Directors consisting of eleven members. Six members shall be designated by 
the Regional Development Councils, Provided however, that they shall have 
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been residents of Mindanao for at least seven (7) years immediately preceding 
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their designation. The remaining members of the board shall be the Secretaries 
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of the following departments: Department of Transportation and Communication 
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(DOTC); Department of Tourism (DOT); the Department of Trade and Industry 
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(DTI), the Department of Agriculture (DA, and the Department of Public Works 
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and Highways (DPWH) . 
The chairman of the board shall be selected by the 
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President of the Philippines. The members of the Board need not be stockholders 
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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 and assume office; but their successors 
shall be appointed for terms of three years, 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 member shall 
receive a per diem of Eight Hundred Pesos(P800.00). 
SECTION 6. Powers and Dufies of fhe Board of Directors. - The 
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Board of Directors shall have the following powers and duties: 
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a) To prescribe, amend, and 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 committees 
or committees as the Board of Directors may deem necessary to 
facilitate its business. 
b) 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 and/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. 
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SECTION 7. Suspension and Removal of Directors. - Any member of 
of Directors may, for cause, be suspended or removed by the 
the Board 
President of the Philippines. 
SECTION 8. Prohibition for Board Membe 
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. 
SECTION 9. General Manager; Powers and Duties. - The management 
of the Corporation shall be vested in the General Manager, who 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 
participate in its deliberations, with the right to vote, and to prescribe 
any meetings for or in the absence of the Chairman; 
c) to submit within sixty (60) days after the close of each fiscal year an 
annual report, thrdugh the Board of Directors, to 'the Office of the 
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President of the Philippines; 
d) To appoint and fix the number and salaries, with the approval of the 
Board of Directors, of such subordinate personnel as may be necessary 
for the proper discharge of the duties and functions of the Corporation, 
and 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. 
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SECTION 10. Appointment and Promotion. - In the appointment and 
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promotion of officers and employees, merit and efficiency shall serve as ’ba’sis,’ 
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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. 
SECTION 11. Exempfion from Taxes, Duties and Port Charges. - 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 consists 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. 
SECTION 12. Audif 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 salaries and all other expenses of maintaining the Auditor’s 
office shall be paid by the Corporation. 
b) Report - The financial transactions 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 
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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; ti 
statement and surplus or deficit analysis; statement of income and 
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. 
SECTION 13. Legal Counsel. - The Corporation shall have its own legal 
department, the chief and members of which shall be appointed by the Board of 
Directors. 
SECTION 
14. 
Exemption 
from 
the 
Land 
Transporfation 
Commission Act. The Corporation shall not be subject to the authority and 
supervision of the Land Transportation Commission. 
SECTION 75. 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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SECTION 16. 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 Philippines, the national security or interest is 
in imminent danger, employees and laborers of the Corporation shall not strike 
for the purpose of securing changing or modification in their terms and conditions 
of employment during said period of emergency 
SECTION 17. Reversion of General Funds. - All funds resulting from 
dissolution and liquidation of the Corporation as herein provided shall revert to the 
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general funds of the Government. 
SECTION 18. 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. 
SECTION 19. 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 provisions of this Act, are hereby repealed or modified 
accord i ng I y . 
SECTION 20. 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. 
SECTION 21. EHecfivify. - This Act shall take effect upon its approval 
Approved, 
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