FOURTEENTH CONGRESS OF THE 
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First Regular Session 
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REPUBLIC OF THE PHILIPPINES 
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7 
JUN 30 ,'3 
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Introduced by SENATOR EDGARDO J. ANGARA 
EXPLANATORYNOTE 
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 Corporation. 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 be 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. 
w 
/b 
EDGARDO J. ANGARA 
Senator 


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FOURTEENTH CONGRESS OF THE 
1 
First Regular Session 
1 1 7 
.IUN 30 P 3 3 1  
REPUBLIC OF THE PHILIPPINES 
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Introduced by SENATOR EDGARDO J. ANGARA 
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: 
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 kuown 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. 
SECTION 2. Purposes and Specific Powers. - The Corporation 
shall have the following purposes and specific Powers: 
(a) 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. 
(b) 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. 
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SECTION 3. Authorized Capital Stock of 
the Mindanao 
Railways Corporation. - The Authorized Capital Stock of the Mindanao 
Railways Corporation shall be One Billion Pesos (Pl,OOO,OOO,OOO.OO) divided 
into Ten Million (PlO,OOO,OOO.OO) 
shares at par value shares of one hundred 
pesos each (PlOO.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,O00.0O) 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 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 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 members appointed by the President of the 
Philippines with the consent of the 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 
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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 (PSOO.OO). 
The Chairman and all the members of the Board must be residents of 
Mindanao for at least seven (7) years prior to the appointments. 
SECTION 6. Powers and Duties of the Board of Directors. - The 
Board of Directors shall have the following powers and duties: 
(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 
committee or committees as the Board of the 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 andlor remove the General Manager. 
(c) To approve the annual andlor such supplemental budgets of the 
Corporation which may be submitted to it by the General Manager 
from time to time. 
SECTION I .  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. 
SECTION 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. 
SECTION 9. Manuging Head. - The management of the Corporation 
shall be vested in the General Manager. 
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SECTION 10 . 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 ofthe Chairman; 
(c) To submit within sixty (60) days after the close of each fiscal year 
an 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. 
SECTION 11. 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 officers and employees shall be 
subject to the Civil Service Law, rules and regulations. 
SECTION 12. Exemption 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 
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. 
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SECTION 13. Audit 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 hidher 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. 
SECTION 14. Legal Counsel. - The Corporation shall have its own 
Legal department, the chief and members of which shall be appointed by the 
Board of Directors. 
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SECTION 15. Exemption from the Land 
Transportation 
Commission Act. - The Corporation shall not be subject to the authority and 
supervision of the Land Transportation Commission. 
SECTION 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. 
SECTION 17. Strikes During National Emergency. 
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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. 
SECTION 18. Reuersion 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. 
SECTION 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. 
SECTION 20. 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 provision of this Act, are hereby repealed 
or modified accordingly. 
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SECTION 22. Effectivity. - This Act shall take effect upon its 
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approval. 
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Approved, 
SECTION 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.